Finally, before locking in a mortgage rate, be sure that you are financially prepared for this step. Financial preparation is key to the totality of the home-buying process, and locking in a rate is no exception. If you find and try to lock down a great rate, but in the end, you aren’t financially ready to apply for and qualify for a mortgage, then you’ve not only lost on a great rate, but you’ve wasted time and energy for nothing. As I’ve said a number of times throughout this book, some of the pieces of being financially prepared including checking (and possibly fixing) your credit score, saving and having enough for a down payment, keeping on top of building up your regular savings account, determining how much you’ll need for monthly mortgage payments — as well as other standard costs, such as closing costs, homeowner’s insurance, property taxes, and ongoing maintenance — and looking for homes that fall within your budget. Bankrate.com adds that “if you lock in a rate too soon and end up going with a different type of loan, your rate lock might be void.” You could also lose out on a mortgage rate lock if your situation happens to change, including a significant credit score shift or change in debt-to-income ratio, before closing and ultimate settlement.
THE BOTTOM LINE
In the end, when you’re shopping for a home loan, looking
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