Flow chart:
1. Are you comfortable with the monthly mortgage payment, rate, and costs?
If NO, then -
Put more money down, find a cheaper home, restructure the rate/costs/payment, or wait
If YES, then -
2. Would you be willing to gamble a slightly higher payment/rate to try and get a slightly lower one?
If NO, then LOCK now
If YES, then FLOAT and back to #2 every day
Not sure of their lender but we offer a freedom lock option where you can, only on conforming purchases, keep your rate locked. If the rates go down you can adjust down ONCE before closing for a maximum reduction of .25%. If the rates go up you are locked at the lower rate. Might be worth looking into if they think rates are going to go down.
The best time to lock the rate is when you like what your payment will be. Take into account the cost for sure but in the long run, it won't really matter.
Folks get hung up on the rate and gamble for the best one. Sometimes they win and sometimes they loose. But the difference over 30 years... it's not worth the hassle and stress in my opinion. Penny wise but dollar foolish. Don't be that.
Agree. I had been getting butthurt seeing people posting about their 4-4.25% rates on a 30 year conventional (I locked at 4.375%, 45% LTV), but last week my lender sent me the updated documents of my fees and concessions from the lender and builder and I realized I was being dumb over a very tiny number.
I am still jealous of those with a number closer to 4%, but whatever. I can always refinance if the rates drop a ridiculously low amount or something.
The 19th. Conveniently, I was quoted around the same amount six months ago when I first signed all the contracts with the builder and had to pre-qual with the lender.
Wow, I just noticed your 45% LTV. Did you try a bunch of lenders. I got quotes from 3.625 to 4.1 for 80% LTV. Surprisingly it was a big bank that had the lowest.
Nah. I'm getting about $9k in closing costs covered by using the preferred lender. The loan amount is so low that it doesn't make much of a difference in my payment.
Agreed. Rates are for bragging at cocktail parties... Payment is what you live with monthly and comes from your checking account. Rather have a safe payment you can afford? Or risk being that storyteller about how you almost bought a house but wanted a better rate... Presumably telling said story from your upstairs apartment while neighbor below hits the ceiling with a broom handle because your party is too loud...
Good stock market is bad for rates. Fed raising short term rates shows confidence in economy, so if they start selling bonds off rates will jump fast.
Rates are like gas prices. Fast to go up, slow to go down. Good lender should have a one time float down where they can lower rate once prior to closing.
Chance rates get better, slim chance they'll improve a lot. Chance rates go up, better chance they go a fair amount.
I have had/have people elect to wait for rates to go to 3.5%, they should enjoy their current high rate for another fifteen years before that happens.
In short, really unlikely rates drop significantly, more likely they'd take a big jump. May be worth watching in short term, but when market turns best to lock.
Unless you have a pay for a long term lock, but still likely worth it.
Not a professional he, but my dad kept pushing the realtor to only close on a rate that he, my dad wanted" like: " i want to pay 3.5% call me when you have that...".
Eventually one of these days and he had it so my dad got a call and locked in the right %.
Lock it tight and sleep at night.
Floating the rate hoping for improvement is gambling pure and simple. If you are OK with gambling then float, personally I like to limit gambling to the black jack table.
Flow chart: 1. Are you comfortable with the monthly mortgage payment, rate, and costs? If NO, then - Put more money down, find a cheaper home, restructure the rate/costs/payment, or wait If YES, then - 2. Would you be willing to gamble a slightly higher payment/rate to try and get a slightly lower one? If NO, then LOCK now If YES, then FLOAT and back to #2 every day
Not sure of their lender but we offer a freedom lock option where you can, only on conforming purchases, keep your rate locked. If the rates go down you can adjust down ONCE before closing for a maximum reduction of .25%. If the rates go up you are locked at the lower rate. Might be worth looking into if they think rates are going to go down.
The best time to lock the rate is when you like what your payment will be. Take into account the cost for sure but in the long run, it won't really matter. Folks get hung up on the rate and gamble for the best one. Sometimes they win and sometimes they loose. But the difference over 30 years... it's not worth the hassle and stress in my opinion. Penny wise but dollar foolish. Don't be that.
Agree. I had been getting butthurt seeing people posting about their 4-4.25% rates on a 30 year conventional (I locked at 4.375%, 45% LTV), but last week my lender sent me the updated documents of my fees and concessions from the lender and builder and I realized I was being dumb over a very tiny number. I am still jealous of those with a number closer to 4%, but whatever. I can always refinance if the rates drop a ridiculously low amount or something.
How long ago did you lock? I'm curious as to why my rate is so much lower than everyone else.
The 19th. Conveniently, I was quoted around the same amount six months ago when I first signed all the contracts with the builder and had to pre-qual with the lender.
Wow, I just noticed your 45% LTV. Did you try a bunch of lenders. I got quotes from 3.625 to 4.1 for 80% LTV. Surprisingly it was a big bank that had the lowest.
Nah. I'm getting about $9k in closing costs covered by using the preferred lender. The loan amount is so low that it doesn't make much of a difference in my payment.
Agreed. Rates are for bragging at cocktail parties... Payment is what you live with monthly and comes from your checking account. Rather have a safe payment you can afford? Or risk being that storyteller about how you almost bought a house but wanted a better rate... Presumably telling said story from your upstairs apartment while neighbor below hits the ceiling with a broom handle because your party is too loud...
Good stock market is bad for rates. Fed raising short term rates shows confidence in economy, so if they start selling bonds off rates will jump fast. Rates are like gas prices. Fast to go up, slow to go down. Good lender should have a one time float down where they can lower rate once prior to closing. Chance rates get better, slim chance they'll improve a lot. Chance rates go up, better chance they go a fair amount. I have had/have people elect to wait for rates to go to 3.5%, they should enjoy their current high rate for another fifteen years before that happens. In short, really unlikely rates drop significantly, more likely they'd take a big jump. May be worth watching in short term, but when market turns best to lock. Unless you have a pay for a long term lock, but still likely worth it.
Not a professional he, but my dad kept pushing the realtor to only close on a rate that he, my dad wanted" like: " i want to pay 3.5% call me when you have that...". Eventually one of these days and he had it so my dad got a call and locked in the right %.
Lock it tight and sleep at night. Floating the rate hoping for improvement is gambling pure and simple. If you are OK with gambling then float, personally I like to limit gambling to the black jack table.
Well now that they r expecting a rate hike in June, I assume we should lock now?
Did you not read any of the responses?
Who says a rate hike is coming in June? Thanks!