When Should You Lock In a Mortgage Rate?

A rate lock ensure buyers a fixed mortgage rate in case of interest fluctuations prior to closing. But it could also lock buyers into paying a higher rate if mortgage rates decrease. When should buyers lock in mortgage rates?

You’re Under Contract

If you’ve made an offer, the seller has accepted it, and you’re under contract to buy a house, you may want to extend your rate lock. Most lenders will lock in mortgage rates for 30 days, but if you or the seller needs longer than 30 days to close on the home, you’ll want to extend your lock-in. You should be able to secure a 90 day, 120 day, or 150 day rate lock, but it will likely cost you to extend the fixed mortgage rate past 30 days.

Climbing Interest Rates

If interest rates are on the rise, lock in your mortgage rate as soon as possible.

house rates fluctuating conceptUnsteady Interest Rates

Locking in a mortgage rate offers buyers stability in a market with interest rates that rise and fall frequently. The earlier you lock in your rates, the less stress you’ll experience when looking for a house.

You Need More Money in the Bank

You may need to lock in your interest rates to qualify for a loan. Many lenders won’t approve a loan to someone who stretches their budget too thin. If an increase in interest rates could put your monthly mortgage payments above 28% of your income, lock them in, or you may find your loan denied.

Do you need help finding a home in Woodstock? Call The Premier Group to find your dream home.