My sister and brother in law just put down a deposit on a new house. The house will not be finished until February, and the earliest they can lock in a mortgage is December. Given that rates seem to keep ticking up, they'd rather lock in now before rates go up any further. Anyone know of a way or a mortgage provider willing to lock in a rate now as oppose to waiting until December? Appreciate the help and insight.
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posted: Sep. 6, 2013 @ 10:34a
There are longer term locks, but they are more expensive. I guess depends on what their view of the what interest rates could be in December/January vs. paying a premium on top of the current rate.
I hesitate to recommend a specific one since I have done no research, but just google 'extended mortgage lock'.
posted: Sep. 6, 2013 @ 10:58a
You can't do it.
posted: Sep. 6, 2013 @ 11:11a
It is going to cost you, because the lender is taking on the risk, but there are such programs out there. A quick search located this product from Wells Fargo - I'm sure there are others: Wells Fargo said: Our Builder Best® Program offers rate-lock options that protect against interest rate changes. Features •Protects from rising interest rates while your home is being built •Available with our 3-, 5-, 7-, and 10-year adjustable-rate mortgages (ARMs). Interest rates and payments may increase after loan closing. •Locks in your interest-rate range for three to six months at no additional cost •Provides extended locks for up to 12 months in some situations1 •Gives a one-time opportunity to switch to a new, lower rate within 60 days of closing, subject to approval
posted: Sep. 6, 2013 @ 11:31a
what OP wants are today's rates 6 months from now. It can not be done.
posted: Sep. 6, 2013 @ 11:34a
umcsom said: what OP wants are today's rates 6 months from now. It can not be done.
Sure it can. He's just going to pay a significant fee to do so. It's a simple futures contract. I'll lend you $100,000 at 4% in six months' time; I'm just going to charge you enough to offset the risk of rates rising significantly in that time period. Similar to walking in to a lender today and wanting a mortgage at 3%. I could write the loan; I'm just going to charge enough points to bring the APR up to something that I can afford to fund.
posted: Sep. 6, 2013 @ 11:40a
Yeah it can be done, it varies lender to lender.
My lender offered 120/180 day locks, that carried a .125%/.25% premium to the current 30-day rate, and required a 1% fee upfront to lock in the rate. The fee gets credited back at closing.
Obviously YMMV depending on your lender, but long term locks are possible.
posted: Sep. 6, 2013 @ 12:13p
That is not what the OP wants. You are playing semantics. If you have enough money you can buy anything in life. What OP wants is today's rates without added cost. You can't do that.
posted: Sep. 6, 2013 @ 12:50p
umcsom said: What OP wants is today's rates without added cost. You can't do that. Where does it say that?
I'm not playing games here. Many lenders will not offer an extended lock; some will. Those that do will most certainly charge for it.
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