LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. Loan Love continues to provide their viewers with all that they will need to get the best loan with the interest rate lock advice given in their newly released video.
The Loan Love video says: "If you're shopping for a mortgage you've probably heard how mortgage rates have started to go up after months of record lows. And you've probably also heard, that to get the best deal possible you need to lock in your rate now. But what does locking your rate really mean?"
Simply put, a mortgage rate lock – or a points lock, for that matter – ensures that the rate and number of points the borrower was quoted when they applied for their mortgage will still be in effect when they go to settlement. Not all lenders allow borrowers to lock in rates or points; of those that do, some lenders allow borrowers to lock in their rates and points when they file and some allow borrowers to lock them in during the application process. Typically, most borrowers prefer to lock in their rate and points when they submit their applications- especially in a market when interest rates are more likely to be rising (as they are now).
The Loan Love video continues: "Well it's actually pretty simple. If you're like most mortgage hunters, when you apply for a loan probably one of the biggest reasons you are applying for it is because it has a low interest rate, right? The problem is, interest rates are fickle, they can change pretty quickly, like in a week or even less. On the other hand the loan approval process can take several weeks. Who knows where mortgage rates will be by then! A lock guarantees that the low terms that were in affect when you applied will still be valid once your loan is approved. They're locked in. Of course, if rates go down before your loan is approved, you may want the option of adjusting your rate downward. In that case you should look for a lock that lets you "float" the rate. Sometimes you can lock in your points too."
These tips can help home owners to avail of the best interest rates and avoid getting stuck with the higher rates that many are predicting are on the horizon. Loan Love's website gives homeowners one last word of advice when it comes to rate locks: "Always ask to have the terms of your lock-in provided in writing, not over the phone. If discrepancies occur, you want to be sure you have everything in black and white. Review the agreement carefully before signing to avoid unpleasant surprises at closing."
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