Financing in Los Angeles>Question Details

Sam, Home Buyer in Los Angeles, CA

Should I lock the rate now? The new home will be completed in around October time. I am taking an FHA loan

Asked by Sam, Los Angeles, CA Tue Apr 14, 2009

and the lender is offering me a 5.125 percent 30 yr fixed if I lock this week with a fee $2606 for more than 200 lock days. Is it worth paying the money to lock this rate now for an FHA loan of 5% down or wait for some more time and then lock? I appreciate your help

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Sam, before you lock the rate there are several things you should consider, such as value of the property and assurance that it will be completed by then. The rate go up higher or maybe lower than today, but only time will tell. The real question is if it is worth paying $2606 for the lock? You could make the builder responsible for an extension if they do not finish in time. There are several things you can do, but make a list of the pros and cons before you make a decision.
0 votes Thank Flag Link Tue Apr 14, 2009
Hi Sam, there's no way to know what direction rates will be heading in October. My bigger concern is what happens if the Builder is not finished with your home in October and your 200-day lock expires. Also, what happens if the home appraises for less than your contract price?

For other considerations see:

There is quite a bit to be aware of....

Best, Steve
0 votes Thank Flag Link Tue Apr 14, 2009
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