adequately shop the mortgage market.
The ever-changing rates can confuse almost anyone, and timing is important. One day the rate might be 5%, and the following day it could rise to 6%. Many people overlook the shopping aspect and approach a single lender to avoid going through the “hassle” of looking for the best deal. These buyers could end up with their “dream” home, but it might come at a steep price, such as a significantly higher monthly mortgage payment.
LOCKING IN A RATE
“Obtaining the lowest available interest rate on a mortgage should be every prospective homeowner’s objective,” says Lisa Smith from Investopedia. The reason is simple: Lower interest rates mean lower monthly mortgage payments, which can mean affordability in the short term and significant savings over the long term. Learn and know when to lock in your mortgage rate. Mortgage rates change from day to day, and sometimes within the same day. “While advertising may have lured you in with an impressively low mortgage rate, that rate might not be available months from now when you close on your mortgage,” says Smith. You don’t want to miss out on a great rate or cost yourself a lot of money down the road, should the market take a turn for the worse and you’re stuck paying a higher interest rate, waiting for the market to settle. If you’re concerned about the market in your area or worried that rates will climb even further before closing, get a “mortgage rate lock.”
WHAT'S A MORTGAGE RATE LOCK?
A mortgage rate lock is “an agreement between a borrower and
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