Loan Locks – When is the Best Time to Lock a Loan?
When it comes to locking the interest rate on a mortgage loan, everybody wants to time it to get the best deal. There’s nothing wrong with that sentiment. It’s normal. Some of the time you’ll get lucky and some of the time you won’t. In other words, it’s a roll of the dice. With a locked interest rate, however, you are guaranteed that if interest rates go up by the time you are ready to close, you will pay the lower interest rate. What are the risks if the loan is not locked? Let’s say you decide to wait. You’ve narrowed down where you will get a mortgage and looked at all your loan choices. Maybe you’ve even decided on the loan product you want. But the market is moving down. The Fed has cut rates twice and you expect them to drop further. So you decide not to lock. It’s a gamble. But if rates go up, you have absolutely no protection. You’re going to pay the higher rate. What are the main elements to loan locks? When deciding to lock
