Mortgage Rates Drop…Again

Mortgage rates dropped again today (Friday, Oct. 19) as investors pulled out of the stock market (DOW down 360) and fled to mortgage backed securities. So, what does this mean? It means mortgage rates are at their lowest point in months.

Have Rates “Bottomed Out”?

If you’ve been waiting for rates to bottom out this may be it. If they are at a low point are you ready to “lock-in” your interest rate? Locking a rate means just that. When we lock your rate we are "freezing" a certain rate for a specific “lock period”. A lock period means the rate lock has an expiration date. Usually 30, 45, or 60 calendar days from the day you lock. You must close before expiration or you could be subject to current rates - especially if they have increased since you locked. The longer the lock period the higher the cost.

Are you ready to Lock In a Great Rate?

How many of these steps have you already done? If you can say ‘yes’ to all of these steps you may be ready to lock your rate:

1. I am ready to buy a house.
2. I have met with my loan officer and they have reviewed my credit and financials.
3. My loan officer has explained available loan options and answered all of my questions.
4. I have signed an initial loan application - including disclosure and authorization forms.
5. My loan officer has pre-approved me to buy a home in my desired price and payment range.
6. I have been viewing homes with my REALTOR® and I am ready to make an offer (or I have already made an offer on a home).
7. I have a pre-approval letter from my loan officer for my REALTOR® to submit to the seller with my offer.

Preparing to Lock

Remember, the clock starts ticking once you lock. Of course you will have already met with a loan officer by the time you are ready to lock. But you should also have a pre-approval letter in hand before you lock so that you don’t unnecessarily lose any days of your lock period. You may need those days later. When you make an offer on a home and after your offer is accepted by the seller it will take a week or so to get an appraisal and title report done and another few days for approving your loan. It is also a good idea to have some extra days in case of any unforseen delays (the seller is ill, the weather is inclimate, etc.).

Trying to rush the home buying process to meet a lock deadline can be very stressful – especially if you haven’t found the right house yet. Don’t let extended negotiations with a seller jeopardize your rate lock. You can lock early on an extended lock but longer lock periods will cost you more. Locking your rate after the seller accepts your offer and after any contingencies are removed is usually best.

For the current rates of 10 of the top national and Twin Cities lenders call me at (952) 292-0285 or email pete@theshraderteam.com.

I'd would be happy to answer any questions you may have and help you get prepared to lock-in a great rate!

Pete Shrader, The Shrader Team

Loan Officer, MoneyLink Mortgage

REALTOR®, MarketLink Realty

Pete Shrader is a REALTOR®, loan officer, real estate investor, and author.

MarketLink and MoneyLink have offices in Eagan, Chanhassen, Inver Grove Heights, Golden Valley, and Blaine MN.

Not a commitment to lend or an offer to lock a rate. Rates are subject to change - often and without notice. ©2007 The Shrader Team www.theshraderteam.com