We often get asked when to lock-in the interest rate after you have entered into a contract to purchase a home. You typically have 30-45 days to close, so you’ll have to lock-in the rate during this time. Hopefully, during the pre-qualification process, you had discussions with your loan originator as to interest rates and payments you would be comfortable making. It is during this process when you can consider your options of loan products, payments, and interest rates. Many times, lenders will qualify you for a higher payment than what you would want to pay. Make sure the payment fits within your budget. It is likely you’ll be making this payment for a long time.

So, when it comes time to lock-in the rate, you have already considered your payment options, and you’ll know what interest rate results in the payment you’re comfortable making. You can choose not to initially lock the rate and float it. But, you will have to lock the rate within a week or two of closing, so the rate could go up as much as it can go down. If the rate is in your comfort zone, you may want to lock it.

If you have any questions on this, let us know.