How to Lock-In Interest Rates for Home Loans

Video Transcript

"Locking in interest rates for a home loan can be a good thing to do when you're purchasing a property. I'm Richard Black in Clearwater Florida. I'm here to explain how to lock in interest rates for a home loan. What you want to do is find out what today's interest rates are. If today's interest rates are historically low and they maybe rising in the near future you're going to want to talk to your mortgage broker about locking in a rate as soon as possible. Generally the lender is going to make a commitment for an interest rate if they know that you are going to purchase a property within a certain period of time; generally thirty to sixty days. To expedite the process you're going to need to get your personal information to your mortgage broker as soon as possible. The information that you're going to need to submit is items such as your social security, your annual income, your monthly debts, any credit card bills that you have, car payments, alimony, child support, any items that are consistently paid on a monthly basis you're going to want to give that information to your mortgage broker as well as your annual income, your W-2s , 1099s , so on and so forth. That is going to allow them to pre-approve you for a loan. Once you're pre-approved for the loan they can actually discuss locking in the interest rate with the lender. OK. The lender will allow you to do this as long as you purchase the property within generally a thirty or sixty day period of time. If it's going to take longer than that to purchase the property they're probably going to charge you a small fee to extend that interest rate that you are locked in at. OK. This can be a good thing, because if interest rates have gone up considerably over the month or two month period of time that you've been shopping for the property you're still going to save a lot of money in the long run, so it is a good thing to do. OK. Hope that helps you a little bit in explaining how to lock in your interest rate. I highly recommend you consult your local mortgage broke. I'm Richard Blake in Clearwater Florida. I hope you guys have a great day."