Should I lock in the mortgage rate?

RISMedia's Real Estate Information Network Member Directory

Should I lock in the mortgage rate?

Because the interest rate market fluctuates constantly and is subject to quick movements without notice, locking in a mortgage rate with a lender certainly protects you from the time your lock is confirmed to the day it expires.

Lock-ins make sense in a rapidly-rising rate environment or when borrowers expect rates to climb during the next 30 to 60 days, which is typically the amount of time a lock-in remains in effect.

A lock-in given at the time of application is useful because it may take the lender several weeks to prepare a loan application. These days, however, automated loan practices have cut the time quite a bit.

Lock-ins are not necessarily free. Some lenders require you to pay a lock-in fee to guarantee both the rate and the terms.

If your lock-in expires before you close on the loan, most lenders will base the loan rate on current market interest rates and points.

Join RISMedia on Facebook and share your views on this topic. Visit www.facebook.com/rismedia to continue the conversation!

Looking for fresh, daily content for your blog, newsletter or website? REsource Real Estate Content Solutions provides access to thousands of RISMedia articles and videos starting as little as $9.95 per month! Visit resource.rismedia.com now and get publishing today!

RISMedia welcomes your comments and questions. Email realestatemagazinefeedback@rismedia.com.