Lock Mortgage...I am currently negotiating the price with the builder and house closing should be in November. It should be finalized soon.

Asked by Venki, 03062 Wed Jun 9, 2010

I have a quick question for the you. My question is...

When is the best time to lock the Mortgage?

Can I lock once I sign the contract?

Does it cost more or extra for locking early?

What is your recommendation?

Any advice would be greatly appreciated, thanks
782 credit score
$0 Debits
20% down and my loan application looks clean.

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David Belman’s answer
David Belman, Agent, Waukesha, WI
Wed Jun 9, 2010
Most lenders will only allow you to lock the rate for up to 45 to 60 days. You may be able to find a longer rate lock (60 to 120 days) but it will most likely be at a higher percentage rate or have points or fees. Some lenders also allow a float down option so if rates drop lower you can take advantage.

Ideally, now would be an excellent time to lock the rate because they are at historic 50 year lows. Rates are expected to go up in the near future. You might even want to explore closing earlier to take advantage of these fantastic interest rates. You will need a signed contract signed to lock your loan.

Also check with at least 3 lenders and find the one that you are most comfortable with and has the best program for you. Make sure you know whether they are going to portfolio the loan (keep it in house) or sell it on the secondary market. I also assume you are pre-approved so you know your spending limits prior to purchasing. Good luck on your purchase!
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1 vote
Scott Godzyk, Agent, Manchester, NH
Sun Jun 13, 2010
If you are not closing until November, in order to lock a rate now it will cost you either a higher rate or an upfront fee. Most lenders will recomend a 30-45 day rate lock. Your best bet is to ask your loan officer what is available to you and what the rate or cost of each is. Good luck with your purchase.
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0 votes
, ,
Thu Jun 10, 2010
Assuming you are dealing with a good lender or broker they will generally be able to tell you a good time to lock. Our office, and our company, monitor the financial markets throughout the day and will lock any loans that we can on dips in the market so our clients get the best possible rate at closing.

Typically, long-term locks are cost prohibitive unless there is reason to believe that a substantial upswing in rates is imminent. There is alot of caution and volatility in the market right now, new home sales aren't exactly stellar and unemployment is still very high. Based on those factors I wouldn't lose sleep on rates moving too much higher in the next several months. Generally, the summer months aren't kind to the equity markets anyway, which is good thing for treasuries and will help keep rates low.
0 votes
Tim Joyce, Agent, Nashua, NH
Wed Jun 9, 2010
A general rule is the longer the lock the higher the rate, we have terrific rates now and anyone tells you to float and the rate goes up will you be upset? Check with the lender if you lock is there a one time float down option for the lower rate prior to closing. Talk to you lender to look at all options as the financing world is changing daily.
Good luck
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