Question by brazilnutrhodes: I am going to buy a home in 1 year. Can I lock in mortgage rates today?
I will be purchasing a house in one year. I believe long term mortgage rates are around their low. I am concerned about where those rates will be a year from now. Is there a way I can agree to borrow from a lender and lock in today’s mortgage rates?
Best answer:
Answer by Dav
The only way to find out is to talk to some lenders.
What do you think? Answer below!
I don’t think so, usually there’s a time limit on locking your rates, for a month or so. The idea is so the rates will remain the same in between signing the contract and the actual closing.
good luck!
you may be able to, but you will pay a premium to do so.
many mortgage companies allow you to ‘lock in’ rates for 30 days or more, BUT you have to pay a fee to do this. The longer the lock in period, the higher the fee. at one year out, the fee you pay will be VERY high, and probably not worth the savings on the rate.
you can get an assured mortgage rate by hedging with an interest rate futures contract.
if interest rates go up, you make money on the futures contract which compensates for the increased interest you will pay.
if interest rates go down, you will lose on the contract, but also save on your payments.
like any other form of hedging or insurance, you will be paying a small price for the peace of mind.
That would be great… but no, you can’t. Most lenders will lock you as far out as 60 days. There are 90 and 120 days available with some lenders but these extended locks will cost you.
help@choicefinance.net
I hate to be blunt but everyone in this thread is incorrect.
Yes you can lock in a loan rate for a year, it will likely cost you a point or so (not such a big deal if you expect rates to rise). The longest free lock is usually 45 days. Some shady broker house will charge you to lock rates but large BANKS like mine really aren’t concerned about a few dollars here or there if we can do your entire loan instead. If you have any questions feel free to email me. Otherwise good luck, and I would stop taking advice about the biggest financial decision you will ever make from people who aren’t in the industry.