incrementally higher fees, often in 30-day increments.
Step #6. Know When to Lock in a Rate
So, how do you know exactly when to lock in a mortgage rate? First, know that you can’t lock in a mortgage rate until after you’ve been approved for a loan. (Yet another reason that getting pre- approved for a loan is so important!) Also, I recommend that you decide to wait to lock in a rate until after you’ve found “the one” home (the one that meets your needs and most of your wants), and put in an offer. Further, plan for this process of waiting for the right time to lock in a loan rate to take time. For example, if you lock it in too early — you’ve found the right home — and the process takes longer than you planned for, you could easily miss out on a better rate, or end up paying more to extend the mortgage rate lock period. Remember, the longer you hold a rate lock, the more expensive it becomes. According to Bankrate.com, “a borrower who chooses a 30-day lock on a loan may pay a 4.875% rate and zero points, while a 60-day lock might cost 1 point (equal to 1% of the loan) or a slightly higher rate with a half-point.” Yet waiting isn’t always the best route to take. What do I mean by this? Some buyers “jump” on a low rate as soon as it becomes available (after home loan approval, of course), and this often works out to the advantage or favor of the buyer. Keep in mind that there is still the risk of having to pay for an extension if you don’t find the right home in time, but as mortgage rates are generally expected to rise, locking down a low rate as soon as soon as you can could be a good idea, even with the risk. But you don’t necessarily want to rush. “Because of the fear of rising rates, many borrowers rush to lock in a rate as soon as
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