Interest rates change every day, so locking your mortgage rate can be an important homebuying strategy to consider.
Interest rates sometimes change a lot, and sometimes they are tiny. These interest rates are based on what is going on in the economy and the government, so rates are fairly unpredictable!
Your rates can change after being prequalified
One of the most important things to know is that even after you get prequalified for a mortgage, your rate and your payment could change. You should count your prequalification as a reasonably accurate quote. The numbers you see at the time of prequalification are “today’s rate.” Tomorrow is likely to be different. Your interest rate is not set in stone until you have “locked” your rate.
Lock and shop programs
Sometimes, rates can increase significantly in a short time. If you want to make sure that your interest rate doesn’t change while you shop, have a discussion with your lender about the pros and cons of locking your mortgage rate. You could end up saving a lot of money if rates show trends of increasing quickly.
Otherwise, when you have a contract on a property, the lender will lock in your rate. Locking the mortgage rate ensures the rate doesn’t change on the home that you are purchasing. If rates are volatile when you are under contract, strategize with your lender about when the lock should occur.
The most important thing to remember is that a rate lock gives you confidence in your payment.
This discussion should also be a reminder to get a new prequalification if rates have changed in the past few months. A lot can change in a month’s time. It’s possible that your budget may be impacted by what has occurred in the mortgage market.
Call or text me for some great lender contacts and questions about your situation. I’m happy to be your resource: 480-639-9640.
