Your loan rate plays a major factor in determining the monthly payments you’ll be responsible for on your new home. Since these rates change daily, certain market conditions can make it difficult to estimate your payment. A rate lock gives buyers a window of time where the rate is guaranteed to remain stable, so long as the closing occurs before the end date.
• Before getting a rate lock, determine how long it will take to go through the financing process and get to the closing table.
• Most rate locks are available for 30, 45 or 60 days and come without additional fees.
• If interest rates are high and falling, a rate lock may not be ideal, since it would prevent the buyer from closing at a lower rate.
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Chris: The rates change daily depending on what the markets doing. So we lock the rate to make sure that when we when we shake hands and you say this is the payment that I’m comfortable with that we lock it in and we make sure that you get that rate.
Asheila: When locking in a rate a customer wantsto think about how far out they are from actually moving into the property and how long it’s going to take them to go through the financing.
Shirley: That’s what the rate that your interest would be at the time of your closing. And it kind of like insures you you know how much you’re goingto be spending monthly because this is the rate that you’re going to have fixed.
Chris: Typically, you know, you’re locked in from a thirty days, forty-five days, or sixty day rate lock. That means that rate is locked. It will not go up. It will not go down with any other market changes. So it gives you some security.
Shirley: If it, if the rates are really high you don’t want to lock in because you’re hoping that the rates do go down.
Chris: If the rate does change tomorrow or the next day and we don’t lock that rate then they’re going to have a higher payment or a little bit additional cost to get back to that rate.
Pat: If you haven’t found the right house, thenyour rate expires, then you have to go with the existing rate at that time which could be higher. If it’s a really good rate you should be on it and lock it.
Shirley: Interest rates and things like that can change in a heartbeat and then things could skyrocket, so I would want to be locked in. So I can’t predict tomorrow but right now I know that if I lock it in then that is what my rate is going to be.