Trying to predict the future for interest rates is impossible. There are numerous factors that can impact interest rates. Clients who are looking at closing on a mortgage several months out, have to evaluate the risk that a move in interest rates can have on their transaction.

Mortgage rates can and do change frequently. Rates can move in a clients favor and they can move against a client. With most mortgage money coming from Wall Street and the bond market, there can be volatility.

I like to tell clients mortgage rates can fluctuate like gas prices. On one day the price may start at $x per gallon and by the afternoon the price can go up or down to $x per gallon. Like gas prices, mortgage rates can change suddenly and with little notice.

Clients with a transaction that will close several months out may want to give consideration to an extended rate lock. We offer extended rate lock options that allow you to lock in your interest rate for up to 360 days. Best of all, this option comes with a float down option.  Should rates be lower within 45 days of closing, you may be eligible to take advantage of a lower rate (if available).

Rates and terms for this option depend on a number of factors such as your loan characteristics and the length of time you would need to lock in for.  Extended lock periods are typically available for the following periods; 90, 120, 180, 240, 300 or 360 days.  The shorter the period of time you lock for, the better the terms and vice versa.

The float down option is available one time within 45 days of closing. In the event that you are within 45 days of closing and current market rates you are eligible for are better than the terms you originally locked in, you would have the ability to float down.  This option can only be exercised one time upon your request.

IMPORTANT NOTICE ABOUT REQUIRED DEPOSIT

The extended rate lock will require a deposit that is equal to a percentage of your loan amount. The amount of the deposit will vary based on the length of time you choose to lock your rate for.  The deposit must be paid within 7 days of locking in your rate and is non-refundable in the event that your transaction does not close (for any reason) or your rate lock were to expire. If you do not pay your deposit within 7 days your rate lock will be cancelled.

This rate lock and deposit is non-transferable to another client and/or property.  Should you close within the rate lock period, your deposit is credited back to you at the time of closing.

Our extended rate lock with a float down option does give you the ability to protect yourself against higher rates with the potential to do better in the event that rates are lower when you are within 45 days to closing.