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How Do I Know If I Should Lock In A Mortgage Interest Rate?

By Eric Goodwill

When shopping for a home, one of the most important decisions is selecting a low interest mortgage rate. If you have found a low interest mortgage, but have not yet found a home, you may want to lock in your rate. There are various situations where you should lock in a mortgage interest rate prior to purchasing your home.

You Have Found a Very Low Rate

A situation where you have found a very low rate is the first situation when you should lock in a mortgage interest rate. While mortgage rates tend to go up and down, finding a low rate could be a temporary thing. If you are afraid of losing your rate, then you should lock in your rate. Many mortgage lenders will allow you to lock in a rate for up to 45 days.

Locking is Free

When locking your rate is risk free, you should lock in a mortgage interest rate. When shopping for a mortgage, some mortgage lenders may try to charge you a fee for locking. This fee should be avoided at all costs because many mortgage lenders will lock your rate for free. If locking is free, then locking in your rate will be a good idea.

There is No Risk

When there is no risk to locking, you should lock in a mortgage interest rate. One of the biggest risks associated with locking in rates is that market rates will drop in the future. Prior to accepting an interest rate lock, you should ensure that you will be able to take advantage of even lower rates if market interest rates happen to drop while you are in your interest rate lock period.

Related posts:

1. When Is The Best Time To Lock In A Mortgage Rate?
2. What Happens If I Don’t Lock My Mortgage Interest Rate?
3. When Is It Safe To Lock In My Mortgage Rate?
4. If I Lock In My Mortgage Rate Am I Committed?
5. When Do I Lock In My Mortgage Rate?