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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.