Buying A House And Locking Interest Rates

by Home Buyer Locking At Five Percent

Regarding Buying A House And Locking Interest Rates: Recently we were buying a house. About a month ago, we met with our mortgage broker and had the opportunity to lock our interest rate at 4.875 percent by buying one point.

Our broker informed us that it was the position of her company to encourage people NOT to lock rates since they predicted rates would continue their downward slide. Considering our buyer had not yet received his commitment letter, we were afraid to lock and then have it fall through and have to pay a fee for not taking out a mortgage.

So, we waited. Our broker was constantly e-mailing us rates back and forth. They definitely didn't continue their downward slide.

At one point, we thought we'd have to get 5.5% and buy 2 points. We were not happy because it meant needing an extra $4000 at closing and our monthly payment was nearly $200 more.

The waiting paid off for us, however. We were fortunate enough to lock at 5% and buy 1 point.

This was the last day we had available to lock since we were closing just two days later. Now that we have just closed on our house, I don't plan on looking at interest rates any more. I don't want to know if they went any lower.

Kate Answers: Buying A House And Locking Interest Rates

Dear Home Buyer Locking at 5%, I can't say I heard of a company wide policy that encourages home buyers to NOT lock. I am glad in your case delaying your mortgage rate lock turned out okay although it sounds like you might of experienced a few weeks of volatile rates while buying the house.

I hope you'll come back to my website again in the future. Of course, all of my information is free.

So remember to bookmark to your favorites and visit often for up to date tips for buying a house, mortgage news and refinancing advice.

You can also invite friends to comment on this page or create a page of their own like you did.

Best Wishes,

Ask Kate how to get the best mortgage rates
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Finding Help for Locking Rates

My Interest Rate Lock Guarantee - Help for timing your rate lock.

The best solution to avoiding hidden fees is to ask the right questions before you lock mortgage rates.

Get mortgage broker fees in writing or your rate lock is meaningless!

How good is a mortgage interest rate lock guarantee?

Yield Spread Premium is a common reason for losing your rate lock.

Questions to ask before you lock.

Search questions and answers at Ask Kate Mortgage Rate Lock Center I.

More questions and answers at Ask Kate Mortgage Rate Lock Center II.

Comments for Buying A House And Locking Interest Rates.

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Waiting To Lock Comment
by: Anonymous

Interesting. I also have never heard of a lender saying "wait" on the lock.

It's a risky strategy. But with most things in life, context has to be considered.

Normally, you would want to lock your rate ASAP because in world of rising interest rates "chances are" if you do not lock, you will have to pay a higher rate.

But the context now is a world of deflation and "chance are" the rate might go down, hence don't lock. Hopefully they did their homework and "knew" what the worst rate they could live with if taking the chance did not go their way.

Click here to add your own comment.

You can also ask Kate about your mortgage at Ask Kate About Buying a House.

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