Should I lock my Mortgage rates now

yesterday I was told to lock my rate for 7/1 ARM for 45 days the rate will be ~3.65% (i.e an increase of 1% from a few weeks back). I know rate changed a lot in last one week, especially last two days. I dont have firm closing date yet the builder is giving an estimate from 3rd to 4th week of July. Should I wait few more day for dust to settle before loacking down my reate or I should lock it down now.

Just a thought: Do you really want an ARM? Rates are super low right now. If you plan to own the property for longer than 7 years, I do not know if I would recommend an ARM. Not knowing what will happen to your payment after the initial period ends only adds to the risk.

- Simon C. - Jun 24, 2013 at 11:07AM

@Simon Campbell So, SC, rates are "super low"? They are currently at multi-year highs! Guess it all depends on your perspective, but for borrowers who've been looking at rates in the 3's for many months, today's rates are certainly far higher than "super low".

- Ted R. - Jun 24, 2013 at 4:42PM
3 Answers

Just answered a similar question for another MND reader, Sunny, you may want to take a look at that. Your risk tolerance is the big question, along with making sure that you will still qualify for the loan, even at higher rates. It may also make sense to at least look at the costs for a buy down to lower the rate, ask your originator about whether paying any discount points would be in your best interest.

My advice is to lock. There is no crystal ball, but most experts are recommending a lock position if your loan is closing within 45-60 days. Also, make sure to ask your lender if they are able to "renegotiate" your rate if they happen to drop before you close. Many lenders offer this service.

Float downs are typically for longer term locks (ie: a 60 day lock with float down option). I am unaware of any lender who offer float downs on 30 day locks, guess it's possible, but in 13 years haven't run across it yet.