Lock Or Float Interest Rate

by Wanda
(California)

Should I lock or float my interest rate? Hi Kate, I live in California and am supposed to close on a condo at the end of November that is being constructed. The developer has a relationship with a lender that will allow me to lock in an interest rate now for 1% of the loan price (keeping 25% of that at the end for their fee).



It seems as though their interest rates are a little higher than what I've seen from other lenders - I know typically the rate can be higher for a longer lock, but their 30 day rates/locks are higher.

They're also offering 1.5% discount on home price and $2500 off closing costs if I go with them. I'm trying to decide if I should just lock now or keep floating in hopes that rates don't move tremendously higher by November with the option then of going with another lender and giving up the "perks" this particular lender is offering (for potentially a lower interest rate).

What would you suggest? Should I lock or float my interest rate?



Dear Wanda, I can't wait till you try this strategy! Think of playing with balloons when you were a child. Squeezing one end made the other side bulge. Just like a balloon, the lower your mortgage interest rate, the higher the mortgage fees. Conversely, the higher your interest rate, the lower the mortgage fees should be.

More on this strategy at Little Known Secrets To Reducing Mortgage Closing Costs

Think about this too! Consider if paying discount points is in your best interest (or not) at My Best Mortgage Advice On Buying Points

Now shifting gears to locking your interest rate.

Learn why you MUST get your lock in writing at Mortgage Broker Fees and vital questions to ask BEFORE deciding to lock or float your interest rate.

Take a moment to bookmark Lock Or Float My Interest Rate to your favorites and visit often for more mortgage rate lock tips. You can also invite friends to comment on this page or ask another question of their own like you did.

Best Wishes,

Kate Ford of Get-Your-Best-Mortgage-Rate.com



Kate Ford Your MortgageBuddy on Twitter

Your Online Mortgage Advice Friend


P.S. Check out Best Mortgage Rate Blog yourself! It's an entertaining source of mortgage information. Subscribe now to the RSS feed.

Home from Lock Or Float My Interest Rate

The information you obtain at this site is not, nor is it intended to be, a substitute for financial, real estate or legal advice. You should consult an attorney, accountant, lender or real estate agent, as applicable, for advice regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com

Comments for
Lock Or Float Interest Rate

Click here to add your own comments

Thanks
by: Wanda

Thanks, Kate - this was helpful.

Wanda

Wanda You Are Welcome
by: Kate

Wanda,

So nice to hear from you and I'm glad it was helpful. As your transaction progresses, please feel free to ask more questions.

I hope you will also share a picture of your new home with everyone here when it is finished.

Best Wishes,
Kate Ford

Click here to add your own comments

Join in and write your own page! It's easy to do. How?
Simply click here to return to Contact Kate With Your Mortgage Question

Grin and Bear It!

We're getting a facelift! Please bear with me! The content is identical so continue to browse. I'm working as fast as I can to finish up!

Your friend,
Kate Ford

You Can Own My Brain

Lock Answers by Kate - Learn the nitty gritty inside story of locking your mortgage rate.

Refinance Answers by Kate - Refinancing brings out opinions, for sure! Get the facts here.

Answers by Kate For Seniors - Reverse Mortgage, the unique income answer for retirees.

Home Buying Answers by Kate - Learn how to buy a house. Unusual facts to aid your home buying experience.

Credit Answers by Kate - Improving credit could change your life. Find how to get more than temporary results.

FHA and VA Answers by Kate - Clear the fog. The low down on VA and FHA loan requirements.

PMI Answers by Kate - Private mortgage insurance, friend or foe? Do you know how to get rid of it?

ARM Answers by Kate - Do you have an adjustable rate home mortgage? You can ask Kate for help.

Loan Modification Answers by Kate - Unique help for modifying your mortgage. Make sure you don't miss this.

Website Answers by Kate - Yes... Readers even ask Kate how to build a website.