Posted by Home Point Financial on
Securing a rate lock is a smart decision when buying a home. When deciding if you want to get a rate lock, you will probably run across a few questions. At Home Point Financial, we want you to be confident in your decision to secure a rate lock.
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Here are the three most commonly asked questions about rate locks:
A mortgage rate lock is a contractual agreement between the lender and buyer, consisting of four components: Loan program, interest rate, points, and the length of the lock. A mortgage rate lock will honor all four components at agreed upon rates, regardless of what happens in the usual ebb and flow of the market. This is beneficial for buyers who are happy with all four components and would like to lock in the rate for closing.
The buyer typically locks mortgage rates once the seller has accepted the purchase offer. Keep in mind that the longer the lock period (period before closing) the more your loan will cost. You can ask about the rate for different lock periods to determine which will be most beneficial for your situation.
The cost of a mortgage rate lock will depend on the length of the lock. A longer-term rate lock will have an associated fee. It is also important to note that a rate lock may be associated with a higher interest rate. This will depend on how long the rate lock itself is set for.
Still have questions about mortgage rate locks? The professionals at Home Point Financial are here to answer your questions. With Home Point Financial, you will have all the information necessary to make smart decisions regarding your home financing. Contact us today to get started!