What should home buyers do about interest rates when they apply for a mortgage loan?
One of the questions we frequently get asked by borrowers is whether they should lock or float their interest rate. For purchases, it usually pays to get a rate locked in as soon as you apply. Most people are going to close on their purchase within 30 to 45 days, and, for the most part, rates do not move (with some notable exceptions) a whole lot during a time period that short. If a floating rate is going to keep you up at night between application and closing, you should consider locking in. Keep in mind, for most people, what we are talking about is a savings of $10 to $20 per month if interest rates change by 1/8% or 1/4%. On the other hand, for people applying for a large loan, the payoff could be sufficient to elect to float. As a consumer, weigh whether you would be absolutely devastated if the rate went up slightly versus the potential savings to be gained. Today, many lenders offer at least a 60 day rate lock from application at no additional cost, and longer rate locks of per
