When to lock in?

I will be closing sometime between oct 16 - nov 16. I don't know when I should lock my rate. If I lock now I would have to do a 90-day lock and would get a slightly higher rate. If I wait a few weeks I can do a 60-day lock. Do you think rates will continue to go higher the next few weeks. Should I float for a little while or just lock now and take the higher 90 day rate

2 Answers

That question is one that only you can answer. It depends on your tolerance for payment shock or paying addition money for the same rate if rates increase. Most people feel that rates are going to continue higher, due mostly to the eventual realization of FED tapering to their spending spree. Waiting may come with reward, but their is not much downward opportunity in my opinion, unless unemployment numbers are for worse than anyone expects.

The market is so unpredictable at this point that I really couldn't tell you whether to wait or not. We have been seeing increases in rates almost on a daily basis however they seem to be holding somewhat steady. The cost for the longer lock may exceed what it would be at the time you decide to lock further down the process of your purchase. If I were you I would chance it and go for a 15 or 30 day lock when it comes time rather than paying the extra cost for a longer rate lock. That's just me because I do somewhat like to gamble.

The bond subsidization talk has caused a spike in rates but Bernanke did come out and say he would continue through 2014 and the new chairman also expressed their support of the program.

This really is the testing time to see if the market continues to prosper even with the higher home values and interest rates.