When Do I Lock My Interest Rate

The U.S. housing market has experienced dramatic growth over the last 10 years. Much of this has been driven by the continued downward trend of interest rates, resulting in a aggressive increase in housing costs. With interest rates having remained relatively stable over the last 18 months, home buyers can expect to begin seeing a gradual rise in interest rates.

Given this, mortgage programs do not allow the locking of an interest rate until you have found the property you are going to buy. Once you contract and all parties have signed, you need to give serious consideration to locking your rate imediately.

This assumes the interest rate meets your affordability needs. If the rate does not allow for affordability or qualifying under your program of preference, consider the option of buying your interest rate down or doing comparative shopping to insure you’re not being taken advantage of. Do, keep in mind your closing requirements as you most certainly, once under contract, want to avoid unncessary delays.