If you're actively looking to buy a home or refinance, you've probably heard that mortgage rates are at historic lows. Really, rates haven't been this low since Eisenhower was President in the 50s!
It's always a good idea to shop around for the bank or lender that will give you the best rate and the perfect mortgage. However, with mortgage rates being at record lows, waiting too long is ill-advised. No one is quite sure when rates will shoot back up, which could leave you paying more in the long run if you fail to lock-in a low rate.
Lock-In a Record Low Rate
A rate lock is a pledge between lender and client that guarantees the loan at a specified interest rate. Depending on the rate agreement, the lender and the client have a set amount of time to close the loan. This window usually lasts between 15 to 60 days from the day of the rate lock.
Remember not to confuse a rate quote and a rate lock. Just because a lender gives you a rate quote doesn't mean you've locked in at that rate. Once you've officially locked-in a low interest rate, get it in writing. Make sure the rate and terms are clearly defined.
Can You Afford a Rate Jump?
If you're buying a home, would a jump in rates put in danger your chances to qualify for the loan? If you're looking to refinance, are you currently eligible for a low monthly payment which could save you thousands in the long run? If a rate spike would hamper your ability to buy a home or refinance, then don't hesitate to lock-in the best possible rate today.
Don't Wait and Get a Higher Rate
Don't delay too long when you are searching for the best mortgage lender. Waiting too long could cause you to lose the low mortgage rate you were initially quoted. Also, if rates happen to go up while you're searching, you'll miss out on a tremendous opportunity to save on your monthly mortgage payment. Speak with a home loan expert from Quicken Loans today.
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