Andrew Usher, Mortgage Consultant with Usher Financial Group explains Mortgage Rate Lock Periods. “This might seem like an obvious question” states Kim Dodge, the host of the Retirement Ready Real Estate & Finance Show, “But why do we have rate locks?”
Mortgage rates can and do change daily. There are 3 primary reasons to lock a rate:
Certainty – Know your mortgage payment
Protection – From increasing rates
Logistics – Lender preparations for closing
Once the loan is locked the loan must close within the specified time period. That might be 15, 25, 30 or 60 days for example. However, the longer the rate lock period, the higher the fees will be. That is because the lender is guaranteeing the rate for a longer period of time. This is standard throughout the mortgage lending industry.
What if something happens and closing is not going to happen as scheduled or rates drop dramatically after the rate is locked? Listen to more of this interview with Andrew Usher and get all the needed information you need when securing a rate for your next mortgage loan.
Contact Andrew, click here!