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Tips on Locking in Mortgage Rates

Tips on Locking in Mortgage Rates


Tips on Locking in Mortgage Rates

When you speak to a mortgage lender about the most important details for your potential mortgage, rates will almost certainly be one of your primary topics. Mortgage rates, which refer to the interest rate you pay over the life of your mortgage, can go a long way to determining whether the loan is a good or bad deal for you based on your finances.

At Mortgage Investors Group, we can help you with all mortgage rate questions. Here are some basics on these, a few misconceptions, and some tips on when during your mortgage process might be the best time to try and lock your rate in.

Rate Basics

In general, interest rates can be either fixed or adjustable, depending on the type of program you look for. You’re usually looking for annual percentage rate, or APR – this is the total cost of credit, expressed as a yearly rate, that includes interest, mortgage insurance, and any origination fees that come with the loan. In essence, APR is the true amount you’ll pay.

Interest rates can fluctuate based on several factors, including inflation, the stock market, basic economic data, the Federal Reserve, geo-politics and various other worldwide events. These fluctuations can take place during your mortgage application process, meaning the timing you use to lock in your rate could be important.

Rate Misconceptions

There are a couple common misconceptions about locking in mortgage rates:

  • If rates go lower after locking, I can get that rate: Unfortunately, this isn’t always the case. Once you lock in your rate, your mortgage lender locks in that amount of money at that rate on the security market. You’re safe if rates go up, but if they go down, you won’t automatically get a lower rate.
  • I’ll skip locking and hope for a good rate at closing: In most cases, the risks here outweigh the benefits. If rates jump or your situation changes, you have no choice but to pay a higher rate – or you might not even qualify. Locking in earlier generally brings peace of mind.
When to Lock In

When to lock in your rate will vary depending on your situation. There are several options available – usually 30, 45, 60, and 90-day options. You generally want to have your rate locked in by 15 days before closing, and the most favorable period is generally when you’re within the 30-day timeframe. The longer the period, the higher the rate will typically be – from a cost perspective, it’s usually best to hold off until the shorter period.

For more on when to lock in mortgage rates, or to find out what our mortgage company can do for you, speak to the pros at Mortgage Investors Group today.

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Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020