Getting The Lowest Mortgage Interest Rate - Locking in Your Rate

You're getting ready to fold and you're wondering, "Should I lock my rate?" If you are happy with your current interest rate and experience that it is low, then you may desire to lock it and not worry about fluctuating rates on the unfastened market. If you would wish the interest rate to be lower, and experience that if you wait interest rates may decrease, then you can throw off or inquire for a long-term, float-down option rate lock. Although a possibility, long-term rate lock open ups the possibility of the rate increasing while you're waiting for a decrease, and often modern times come up with fees.

What is a Mortgage Rate Lock?

A rate lock warrants you that the mortgage's interest will not climb up past a certain rate if the loan is closed by deadline. For example, if you lock the rate at 6 percent 28 years before closing, and rates rise over the adjacent month, your loan's rate will not change if you close on time. If you decided not to lock and the rates increased, you would stop up paying the higher rate.

When locking, fees are common when the lock is secured beyond 30 days, and especially if it locked beyond 60 days. If the rate is locked before 30 days, in most cases you will not be charged a rate-lock-fee.

Long-term Mortgage Rate Locks

Many long-term locks, state a 180-day lock, offer a float-down option, which intends that if rates have got dropped while you're closing, you can secure the lower rate. Remember though, the interest rate is not yours until you've locked your rate. Mortgage rates change every day, sometimes more than than once, and until you've told your lender to lock the rate on your loan, your interest rate will change day-to-day too.

Written Confirmation for Mortgage Rate Lock

When you lock your rate do certain to get this confirmation in writing. The written confirmation should include the rate, the termination date, and all terms and fees. This measure is important and will eliminate any misinterpretations about your rate in the future.