You’ve probably read or seen news stories with warnings about increasing interest rates on things like credit cards and mortgages. Interest rates can fluctuate rapidly – sometimes multiple times a day – and this could certainly impact the amount of money you pay when you purchase a home. While there is no crystal ball to predict what rates will do tomorrow there are options to help you prepare today to help give you confidence as you begin to shop for a new house.
Defining a Mortgage Rate Lock
If you are just starting your home buying journey, a great option to consider is what is called a lock-in or a rate lock on a mortgage. With a rate lock, you can secure a competitive interest rate that will not change between shopping for and purchasing a home. Depending on the lock option you choose, you will need to close within a specific time frame.
How Much Does a Rate Lock Cost?
In some cases, you will need to pay a small fee to secure your rate, or for longer lock periods you might even see a small rate increase at the time of lock If you close within your timeframe, the fee will often be credited towards your loan and in an improved market, there may be options if interest rates improve.
Extended Locks for New Builds
Instead of purchasing an existing home, maybe you want to build a new home. While you wait for construction to be complete, you may be able to lock a rate during the construction of your new home with an extended rate lock option.
Dollars and Sense of Mortgage Locks
If you are starting your homebuying journey, Axia has rate lock options that may allow you to lock your interest rate on certain loan products now, to help give you confidence while you shop for your new home in today’s market. If you decide to wait and interest rates do rise before you find that dream home, you risk having to pay more over the lifecycle of your mortgage.
Our Axia Mortgage Specialists can help you decide if locking your rate now is a great solution for you. Give them a call today!
Equal Housing Opportunity. Axia Home Loans is a registered tradename of Axia Financial, LLC. NMLS 27830.