When it comes to mortgage loans and interest rates, it's never a good idea togamble. That's why I typically advise my clients to lock in an interest rate at theearliest opportunity. This is just one step of the standardized system we haveput in place to ensure the best possible loan experience for each borrower thatwe work with..

A mortgage loan cannot be closed without a locked-in rate, and there are threemain elements to take into consideration:

· Interest Rate
· Points or fees
· Length of the lock

Locking in a rate does not obligate the borrower to commit to the loan until theloan is actually closed. The lock is merely a security measure designed toeliminate the risk of market volatility throughout the duration of the purchase orrefinance transaction. As long as the loan is approved and funded before theend of the lock period, the borrower will receive the interest rate quoted.

When a lender permits an extended lock-in period, the borrower will likely face a higher interest rate or additional fees thatcould be quoted as points. In other words, the borrower pays for the lender to take on the extended risk of being exposedto potential changes in the market.

For example, let's say a 30-day rate lock commitment costs the borrower one-half point, while a 60-day rate lockcommitment costs one full point. If the borrower in this scenario needed the extended lock period, but did not want to paypoints, then an alternative would be to accept a slightly higher interest rate. In this case, a 60-day lock would typicallyhave a higher interest rate than a 30-day lock.

Our standard procedure is to lock in a rate as quickly as possible. My team and I want our clients to know that whileinterest rates fluctuate daily, most lenders do not want to lose any business because of it. If a significant rally causesinterest rates to drop 0.25% or more, we know that we can most likely renegotiate the rate. In many cases, lenders preferthis option over losing the loan to another lender. On the other hand, if we'd allowed our clients to sit on the fence and notlock in their rate, we would have exposed them to market volatility without a safety net. Then, if rates were to increase, theborrower might no longer qualify for the loan they want - a situation that we want to avoid at all costs.

By knowing our clients' needs and working intimately with them to make the right decisions early on, my team and I areproud to say that we have helped them to achieve their home ownership dreams.



If you'd like to learn more about the loan programs we have available, please call me!.