Racheli Mortgage Lending

Mortgage Lending - (954) 800-0330

  • Home
  • About
    • Meet Racheli your Mortgage Fairy
    • Privacy Policy
    • Blog
  • Mortgage Info
    • Get Pre-Approved
    • Home Search | SOLD Home Alerts
    • How to Buy a Home | The Loan Process and Checklist
    • Loan Limits
    • Loan Programs
    • Credit–What Makes your Credit Score Ebook
    • Mortgages for Self-Employed
    • Mortgages After a Divorce
    • Mortgage Calculators
    • More Calculators
    • How to Buy A Home | Down Payment Assistant
    • Buyer Info
    • How to Buy a Home – Loan Process
    • First Time Home Buyer
    • Mortgage FAQ
    • Mortgage Glossary
    • Credit–What Makes your Credit Score Ebook
    • Seller Info
    • Closing Costs
    • Home Appraisal
    • Fixed Rate Mortgage
  • Real Estate Info
    • Fort Lauderdale Real Estate
    • Boca Raton
    • Miami
    • How to Buy a Home | The Loan Process and Checklist
    • Home Inspection
    • Real Estate News
  • FREE Reports
    • Get Your FREE Reports!
    • 5 Big Mistakes Buyers Make
  • Testimonials
    • Reviews
    • Additional Testimonials
  • Contact
    • Contact – Connect with Racheli Online
    • Ask Racheli
    • Meet Racheli your Mortgage Fairy
    • About-Contact Us
    • Racheli’s List

Racheli Refael June 10, 2016

The Pros and Cons of Mortgage Rate Locks

The Pros and Cons of Mortgage Rate LocksIf you’re just jumping into the game of home purchasing, you are likely considering all of your loan options and may even have heard the term mortgage rate lock. For those who don’t like to gamble, a mortgage rate lock can offer a bit of reassurance, but there are also some downsides to this type of protection. Before signing off on this, here are the details on rate locks so you can make an informed decision.

What Is A Rate Lock?

For many people who are buying a home in such a tumultuous market, the idea of interest rates can make the heart race a little faster, but this is the purpose of rate locks which offer consistency in a market in flux.

Instead of having to deal with day-to-day fluctuations of the rate – which increases or decreases what you owe – a rate lock is a lender promise that you will be held to a specific rate or your rate will not rise above a certain number.

Easy Balancing Of The Budget

The easy thing about utilizing the rate lock, especially for a buyer who is less familiar with the market, is that it will enable you to instantly determine your monthly payments based on that rate. Instead of having to pay more per month, you’ll be able to estimate exactly what your payment will be and it won’t rise above the limit you’ve set for yourself. While daily fluctuations can be a drag, a mortgage lock takes the guesswork out of the day-to-day.

The Added Cost Of Security

It might seem like a rate lock is an option that everyone would utilize, given the stability, but lenders charge for this type of offer because of the risk factor. While lenders can certainly stand to gain if your rate lock is higher than the interest rates, in the event that they rise beyond this point, they will end up losing money. So, while a 30-day rate lock may not end up costing you, this type of lock stretched over a longer period may actually end up costing you more than fluctuating rates.

If you’re not familiar with the world of investing and interest rates, a mortgage rate lock can sound like a great idea; however, there are downsides to this offer and they’re worth considering before getting locked in. If you are currently on the hunt for a home, you may want to contact one of our mortgage professionals for more information.

Spread the Love

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage Rate Locks, Mortgage Tips

Equal Housing Lender
Company NMLS #189233

Previous Posts

Categories

Recent Posts

Get Pre-Approved Today for a new Home Mortgage with Racheli

3 Tips To Consider When Buying A Home With An FHA Mortgage

S&P Case-Shiller Home Price Indices: Home Prices Fall In November

Is It Worth It to Put More Than 20 Percent Down?

What You Need To Know About A Closed-End Second Mortgage

What’s Ahead For Mortgage Rates This Week – January 30, 2023

How Much Home

Connect With Racheli

  • Facebook
  • LinkedIn
  • Twitter
Refer a FriendUse the quick and easy tool below to Refer a Friend today. We sincerely hope you will tell your friends, family, neighbors, and co-workers about our services. You'll be doing them (and us) a favor as they too will receive the same excellent service that you have experienced.

If you know someone who is thinking of buying or selling a home, please fill out the form below, or contact us directly using the number listed at the top of the page.

Click here to refer your friend!

RSS The Latest Real Estate & Lending News

February 2023
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728  
« Jan    
Equal Housing Lender

Archives

Categories

  • Accessibility Statement
  • Privacy Policy

Loans 4 U - Fairway Independent Mortgage Corporation
1471 NE 26th St Suite 100
Fort Lauderdale, FL 33305

Return to top of page

Copyright © 2023 Racheli Mortgage Lending. All rights reserved.   Log In