with interest rates so low, would you recommend locking in the interest rate or floating it. Currently quoted 3.75% in Memphis, TN.

Asked by JeanW, Nashville, TN Tue Oct 23, 2012

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Maria Cipoll…, Agent, Coral Springs, FL
Tue Oct 23, 2012
With mortgage rates sink to new record lows, interest rate in 30 years fixed FHA mortgage average 3.25 percent Freddie Mac reported last week, falling from 3.40 percent average two weeks ago. Now if is a conventional loan you really have to shop around for a better rate than 3.75percent.

Best of Luck,

Maria Cipollone

1 vote
, ,
Tue Oct 23, 2012
Hi Dawna,

If you like to gamble, go to Vegas at least when you lose there it doesn't hurt as long. Lock in your rate and move on with your life.

I do have to ask though what type of loan you have with a rate at 3.75% because rates on FHA, VA & USDA are running around 3.25%. Is it a conventional loan?
1 vote
Bob Brown, Agent, Bartlett, TN
Wed Oct 24, 2012
Find a home to purchase first - then lock in your rate. You can probably be safe to float the rate until after the elections but in my opinion after the election you should get serious, if you really intend to purchase. Remember, who will be in control until Jan 20, 2013.
0 votes
JeanW, Home Buyer, Nashville, TN
Wed Oct 24, 2012
John, yes you are right. We were quoted 3.25% for a fixed 30 FHA loan. We were quoted 3.65 (not 3.75- I had to look back at the papers) if we needed buyers assistance from bank. But we won't be needing the assistance as seller is helping with closing costs.
0 votes
Michael Bell…, , Cordova, TN
Tue Oct 23, 2012
Hi Dawna!

Although rates are low, and the Fed didn't do anything dramatic at it's recent meetings, rates can and do fluctuate. They may not be rising in any significant manner currently, however, a quarter of a percent or more can have an effect on the Buyers payments and the home they wish to purchase.
You may want to shop rates right now, as I do know of lenders who have rates available on 30 year fixed rate mortgages at 3% -3.25% currently.
Generally, since a locked in rate is only available for a very short period of time, you may be better off locating your new home and solidifying a contract on it and then lock in the rate, as a normal closing period may take 30-45 days depending on the position of all of the parties to the purchase contract, and that's pretty much a normal lock period.
If I can assist you with any other comments or other real estate related issues, please feel free to contact me.

Best Regards,

Michael Bellaire, Broker, ABR
0 votes
Ray Gaudet, Agent, Knoxville, TN
Tue Oct 23, 2012
I would float the rate. I think rates are safe until after the election.
Or contact a lender that will "lock" you and allow you to lower it once over the period of your lock term.
We have a few companies that do that in Knoxville; I would suggest calling around to hear about more attractive programs.

Good Luck,

Ray Gaudet
0 votes
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