Should I lock my rate now or wait?

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I am in the process of buying a home in Oklahoma with an expected close date of Jan 31, 2008. My lender is working on the final approval and I have been told we should be able to lock our rate very soon. My good faith estimate currently is 6.059% on 30 year loan with $ 900 mortgage origination fee. My lender has said that because I am self-employed that this is a very good rate. My question is should we wait till the last minute to lock or lock now? It looks like the trend is downward on interest rates the past several months with a few bumps upward occasionally so I am hesitant to lock too soon. What should I do?


  1. Reply
    May 16, 2011 at 3:55 am

    It is a gamble. I like sure things.

  2. Reply
    May 16, 2011 at 4:01 am

    With news from the Fed’s that the rate will be dropped, I wouldn’t lock my rate.

  3. Reply
    May 16, 2011 at 4:24 am

    With only three weeks out, I would go for the lock now. Even if it falls a little bit, it will not have a dramatic effect.

    The federal reserve rates generally don’t have a direct correlation to Mortgage rates, so even if they get cut again, you may not see a change within three weeks. If you were looking at a couple of months, I would tell you to hold, but not on your time span.

  4. Reply
    robert w
    May 16, 2011 at 5:00 am

    LOCK the rate, NOW.
    or be physical able to walk out at signing because u get a bigger rate.
    a bird in hand is worth three in the bush.
    mortgage rate adjust up/down on bases of mortgage companies not FEDs

  5. Reply
    Steve W
    May 16, 2011 at 5:30 am

    US Bond yields, which are a major driver of mortgage rates, are currently at a 3 year low. I would lock as soon as you are able.

  6. Reply
    May 16, 2011 at 5:42 am

    I would ask you, what is your tolerance of risk.

    How much can you save if the rate goes down and how much extra will it cost each month (& over time) if the rate goes up?

    Is the possibility of ‘saving’ worth the risk of costing?

  7. Reply
    May 16, 2011 at 6:23 am

    You origination fee is very high but the 6.059% on a 30 year(fix I hope)would be fine. I’m surprised that the rate isn’t locked already because when a lender doesn’t want to lock a rate it is usually because they know it will go up. Plus with two weeks to go that is a very long time for a lender who is looking to sell your loan so that they make money on the deal. The RED FLAG is the origination fee which should only be $ 300 at the most since the originator only finds someone and collects minimal information from the start. The other work is what they do everyday so that is why I question that particular fee.

  8. Reply
    May 16, 2011 at 6:36 am

    I would lock now. Rates have been very low this week so I wouldn’t pass that up. Just an FYI – your lender shouldn’t be telling you that you get this rate even though you are self employed. I have never heard of rates based on employment status. Also, the origination fee charged on a loan is generally 1% (are you paying for other costs besides the appraisal such as credit report, flood cert or courier fee etc?). I don’t know what your GFE looks like but $ 900 doesn’t seem unreasonable and with the rate so low your lender probably isn’t making anything on the back (at least they wouldn’t be if they locked off my rate sheet today) so that is why you are being charged an origination fee. Lock your loan! Congrats on the new house as well.

  9. Reply
    Real Estate Guy
    May 16, 2011 at 7:14 am

    You didn’t say how much your loan was for. Usually the mortgage origination fee is equal to 1% of the loan. Anything more is high, anything less is low, but usually means that you pay a bit higher interest rate.

    There are no 6.059% rates. I’m guessing this is the APR, which IS NOT your interest rate, but the rate plus the cost to borrow the money. Your actually rate should be a bit lower.

    Even if the rate was 6.059%, this is a GREAT RATE for a self-employeed borrower.

    I WOULD LOCK IN TODAY. You say that you are to close in less then 3 weeks, but still can’t lock in surprises me. Usually you can lock in 30 days before settlement. And in MOST cases 60 days without a lock in fee.

    Rates are great today. Will the go down in 3 week enough to actually make it worth the risk of waiting. NO.

    Could rates go up. YES. God knows what bad news is in the works. When the news of the subprime problem came out several months ago, rates jump anywhere from 1 to 2%.

    Lock in today and be able to sleep at night.

  10. Reply
    May 16, 2011 at 7:27 am

    i woulda locked yesterday, your broker is gambling and hoping to only get a 15 day lock so he gets a higher commission is what it sounds like to me. i’d do it to, nothing wrong with it. but if rates get worse make sure it comes out of HIS pocket and not yours for not locking.
    in regular guy terms-

    the bank will pay him a certain percentage for selling you that loan at that rate. if rates get worse, he can still get that rate, it will just not pay him as much. so make sure he’s not upping your rate to make sure he still gets that comission. and who the heck does 6.059 for a rate…….. thats interesting,

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