Interest Rates: Should You ‘Lock In’ or ‘Float’?
As mortgage rates fluctuate throughout the year, borrowers may be wondering what they can do to save the most money on interest rates. For some, an early rate lock may be the answer. For others, floating until a lower rate becomes available may be worth the risk. All loans are locked in at some point prior to closing, but should you do it earlier or later? Consider the following points to help you decide.
Locking vs. Floating
Locking In sets or “locks” the interest rate of your loan for a specific number of days. Typical locks run in 15 day increments up to 60 or 90 days. Once set, it's important for your loan to close within that period, and hence, locking is safe only if you're sure of the closing date. Floating is the opposite of locking in and simply means your rate is not yet set. It's "floating" with the market. If rates are moving down, you can benefit. If rates are moving up, your rate will, too.
Which is Best?
Unfortunately, "best" can be defined only after the fact. If you float your rate until the last moment and rates fall, you win. If rates rise unexpectedly, you have a higher rate and payment. No one knows for sure which way rates will go. Often, "best" is better determined by your peace of mind. If you will sleep better at night by locking, go ahead. If you're comfortable with some strategic risk and think rates will fall, then float.
Still Undecided?
It may help to realize that very few people ever lock at the perfect time. The market is always moving, and there are just too many influences that cannot be predicted. It's also good to know that once your loan has closed, it's usually easy to refinance if rates end up moving lower. If rates rise, then you can be comfortable in knowing you secured your rate at the right time. Bottom line: The difference in rates from offer to close is usually pretty small. Since none of us can predict the future, simply do what will give you the least stress during this process.
MHQ Mortgage Headquarters Is Here To Help!
Securing a good interest rate requires balancing the different factors for your particular scenario. Fortunately, we excel at balancing acts. Let’s work together to discover what viable options are available and whether locking or floating is the right choice for you! If you have any questions about current interest rates or mortgage rate locks at the Lake of the Ozarks, feel free to contact us! MHQ Mortgage HeadQuarters are your mortgage professionals at the Lake of the Ozarks and would be happy to assist you in financing your dream home at the Lake!
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
Email: info@mhqmortgage.com
NMLS # 1229111
Locking vs. Floating
Locking In sets or “locks” the interest rate of your loan for a specific number of days. Typical locks run in 15 day increments up to 60 or 90 days. Once set, it's important for your loan to close within that period, and hence, locking is safe only if you're sure of the closing date. Floating is the opposite of locking in and simply means your rate is not yet set. It's "floating" with the market. If rates are moving down, you can benefit. If rates are moving up, your rate will, too.
Which is Best?
Unfortunately, "best" can be defined only after the fact. If you float your rate until the last moment and rates fall, you win. If rates rise unexpectedly, you have a higher rate and payment. No one knows for sure which way rates will go. Often, "best" is better determined by your peace of mind. If you will sleep better at night by locking, go ahead. If you're comfortable with some strategic risk and think rates will fall, then float.
Still Undecided? It may help to realize that very few people ever lock at the perfect time. The market is always moving, and there are just too many influences that cannot be predicted. It's also good to know that once your loan has closed, it's usually easy to refinance if rates end up moving lower. If rates rise, then you can be comfortable in knowing you secured your rate at the right time. Bottom line: The difference in rates from offer to close is usually pretty small. Since none of us can predict the future, simply do what will give you the least stress during this process.
MHQ Mortgage Headquarters Is Here To Help!
Securing a good interest rate requires balancing the different factors for your particular scenario. Fortunately, we excel at balancing acts. Let’s work together to discover what viable options are available and whether locking or floating is the right choice for you! If you have any questions about current interest rates or mortgage rate locks at the Lake of the Ozarks, feel free to contact us! MHQ Mortgage HeadQuarters are your mortgage professionals at the Lake of the Ozarks and would be happy to assist you in financing your dream home at the Lake!
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
Email: info@mhqmortgage.com
NMLS # 1229111
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