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When to Lock Mortgage Rates
When to Lock Mortgage Rates
Learning When to Lock Mortgage Rates - Determining whether to lock a mortgage rate is like riding the stock market. This video explains when you should lock in a rate.
One thing to keep in mind when it comes to interest rates is that, like stocks, they rise and fall congruently with the market. Determining the best time to lock an interest rate (if at all) depends on the borrower's individual circumstances.
If the borrower is buying or refinancing during a period of low interest rates and is comfortable with what their payment would be then locking the interest rate would be beneficial. One mistake a lot of borrowers make is "playing the interest rate game." This occurs when borrowers hold out thinking that the interest rate might drop a little more. Once rates are at a level that makes payments for the borrower comfortable its time to lock the rate. Once the decision to lock an interest is made it's essential to make sure that it's in writing. It will save a lot of hassle in the future when rates rise and the mortgage company denies that the rate was, in fact, locked.