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Should we pay $1500 for a 170 day mortgage rate lock?
We are currently buying a new home. The current rate we're quoted by the builder's preferred lender is 5.25% for a 30 year fixed. The home will probably be completed in July 2011, about 5 months from now, which is when our mortgage would be funded.
The loan officer told us that we could lock in that 5.25% rate for 170 days for a fee of $1500. My guess is that rates will go up by July, but I don't know if it would be better to pay the fee to lock in the rate now, or to pay a slightly higher interest rate later.
Do you have any advice? We're new at this. Thanks!!
2 Answers
- Anonymous1 decade agoFavorite Answer
2 things.
1) 5.25% sounds a little on the high side.
2) Find out what the lenders float down option is. This is where lenders will allow you the option to float down your rate 1 time prior to closing if rates get better.
Source(s): I'm a mortgage banker/broker - real estate guyLv 71 decade ago
Without knowing the amount of the mortgage, no one can answer if the 1500 is too much.
HOWEVER, rates are going up and if you can lock in today, I would.