10 things Houston First Time Home Buyers Need to know about locking Their mortgage rate

Hi and welcome! If you are reading this article, you may be in the home buying process or getting ready to start. That said, you may want to talk to your lender about locking your mortgage rate once you have received your initial mortgage approval and found a house you love.

You may also want to talk to your lender about a float-down. But first, what is a rate lock? A mortgage rate lock basically prevent your mortgage rate from going up or down for a certain period of time during your home buying process. It protects you from the day to day market fluctuations.

On the other hand, a float-down, which is an added option to your rate lock, and at an additional cost, lets you get the lower rate if rates fall during your lock period. Here are a few more things to know about locking your rates.

• The most common rate lock is 30 days, however, you can lock your mortgage rate for 45, 60, 120 or 180 days. Keep in mind, the longer the rate lock, the higher the rate lock fee.

• You can usually lock your rates after you have been initially approved and have chosen a home.

• While some lenders offer free rate lock, it is usually for a limited time only, if that time expire, the lender may charge a fee for extending the lock. This fee will vary depending on your lender. Figure a quarter to half a percent of your total loan amount. Locking rate beyond 30 or 60 days will cost more.

• Because mortgage rates tend to be more stable on Mondays, it’s considered the easiest day to lock in low rate.

• You can use your closing date to help you decide when to lock your rate.

• If your loan officer does not mention or offer a rate lock, you can simply ask him/her about it.

• Rate locks can be voided if the information you provided on your application changes.

• You will need a property address to lock your mortgage rate.

• You should get your mortgage lock rate in writing. Although a rate lock can be requested over the phone, you should also get paper/email confirmation.

• Some lenders charge a flat fee while others charge variable fees.

It’s best that you do not try to predict the direction interest rates will go because the events that shape the economy and impact rates are so very unpredictable that you may only end up stressing yourself out.

Don’t forget to ask you lender as many questions as necessary so you can fully understand this process. As always, thank you for visiting. Until next time...Diana.

Image Created by Diana for First Home Houston