What is a Mortgage Rate Lock?
A mortgage rate lock is when a Lender guarantees that you will get a mortgage loan at a specific interest rate regardless of whether mortgage rates change after the lock is made. This is different than a mortgage rate quote, which tells you where rates are at time of inquiry. When you lock in a mortgage rate, you also need to choose a term for repayment as this will directly affect the rate you receive. Most loans are made for 15 or 30 years. Ask your Loan Originator for multiple scenarios so you can compare repayment terms and choose what’s best for you.
Why You Should Lock your Mortgage Rate Today
Interest rates fluctuate daily, moving up and down throughout the day. Watch market trends closely and consider your personal time frame when determining the best time to lock. Currently, the market is trending higher so you may want to take that into consideration when deciding to wait or move forward.
“Interest rates have increased approximately 1.25% within the last 90 days alone, and are expected to go higher once the Federal Reserve discontinues their bond buying program in the very near future. In today’s increasing interest rate environment, it is wise to lock in a rate as quickly as possible to avoid a potential rate increase that could far outweigh any potential rate reduction,” said Jeff Corsiatto, Branch Manager at NFM Lending.
Another leading Branch Manager at NFM Lending commented: “If you have a rate that you are comfortable with and you can afford the monthly payment, you should talk to your Loan Originator and get the lock in writing,” said Bryan Harrison.
Haven’t Found the Perfect Home yet, but Still Want to Lock Today?
Often borrowers that are purchasing a new home wait to lock into rates because loan locks can expire. Traditionally lock periods range from 30 to 90 days, but will vary based on your Lender. NFM Lending offers an extended 6 month loan lock program to eligible borrowers.* This extended lock program helps eliminate budget concerns during a higher trending market. Lock today’s current rate while you find the right home for you.
*Other terms and conditions apply. A 1 point up-front fee may be collected from the borrower at time of lock, which will be applied to the borrower’s closing cost at settlement. Program not available in all areas. Offers may vary and are subject to change at any time without notice.