Michael Holigan: Today we're going to talk about locking in your interest rate, protecting your interest rate. People do this to make sure that they have the same interest rate when they close as they did when they signed up. Let's take a look at long term lock-ins. Actually, first short term lock-ins, 30 to 60 days. That's no charge normally from your mortgage company unless rates have been very volatile just in the past few weeks. Normally they'll guarantee a rate for 30 to 60 days. Ninety (90) days, you're normally going to get charged on. If your builder's going to take 90 days plus, the mortgage company's probably going to charge you money to lock in your interest rate or hold it at that rate for that long a period. It normally starts at half a point and goes up. Float Down Options: Ask your lender for a Float Down Option. If the rates are currently at 8% and they go down to 7%, you don't want to stay locked up at eight while everyone else is going at seven. You want to float down to that rate. Normally they'll sell you a one-time option for a certain price. Sometime it's even free. Ask your lender about it. Float then Lock Options: If you're purchasing a house right now, but you know it's not going to be complete in the next 60 days, you may just want to wait and float until you're within 30 to 60 days and then you can lock at that time. Ask your lender about it. We also have several tips: Get it in writing. Anytime you lock in your interest rate, make sure that the mortgage company and you yourself have both signed it. That way there's no lock amnesia on what your rate was. You don't want to show up at the mortgage company or at the title company to close and it's not what you were promised. Everybody signs it, you feel better, feel safer. Look about locking in your rate, floating it down.
Episode 022 1995 - 96 Season
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