Lock, lock! Who’s there? It’s your mortgage
rate, and I’m on the rise! OK, so we’re not comedians here, but if you’re shopping for
a mortgage, you’ve probably heard how mortgage rates have started to go up after months near
record lows. And, you’ve probably also heard that to get the best deal possible, you need
to lock in your rate NOW. But what does locking in a rate really mean? Well, it’s actually
pretty simple — if you’re like most mortgage hunters, when you apply for a loan, probably
one of the biggest reasons you’re applying for it is because it has a low interest rate,
right? The problem is, interest rates are fickle — they can change pretty quickly,
like in a week or even less. On the other hand, the loan approval process can take several
weeks. Who knows where mortgage rates will be by then? A lock guarantees that the loan
terms that were in effect when you applied will still be valid once your loan is approved.
They’re “locked in.” Of course, if rates go down before your loan is approved, you may
want the option of adjusting the rate downward. In that case, you want to look for a lock
that lets you “float” your rate. Sometimes, you can lock in your points, too. Wanna learn
more? Click the link below to read all about the fascinating world of rate locks and how
they can save you big bucks.