To lock or not to lock... that is the question. Okay, the inspiration for that line came from William Shakespeare however, it does pose an important question if you are buying a home and especially if you have already made an offer to purchase. 
This is a conversation you need to have with your licensed mortgage loan originator. The mortgage backed securities market has been very volatile in the last 30 days and rates have been increasing as a result. All of this started when Federal Reserve Chairman Ben Bernanke stated that the Federal Reserve would begin to taper the purchase of mortgage backed securities at the end of the year. In less than one week the market was down more than 400 basis points. This translates into a 1 point increase in the interest rates. Last week the market took another hit based on the economic data released.
The one thing I can say after 8+ years in this business is that when rates rise rapidly they rarely drop as fast. So if you are a gambler and want to float your interest rate in the hopes that they will drop again my advice is be prepared to pay the price if they continue to rise.
One last note, you must have a subject address in order to lock a loan. So if you are purchasing, you must have a signed purchase and sale agreement. Refinance transaction can be immediately locked. If you are making a purchase don't gamble, LOCK THAT RATE!
Comments(7)