On the issue of rate locks, in our conservative opinion, it is a business decision as to precisely when to lock. Many clients wait to lock in a rate until they have been approved by the board, or at least after an interview has been scheduled. Since, unfortunately, there are many uncertainties, including that we do not know when the board interview will take place, much less when the board will render its decision, or when the seller will definitely seek to close, it may not be wise to lock-in a mortgage rate right away. However, this is a calculated business decision on the part of the buyer, based on a number of factors, including: the costs of locking a low rate early, the risk of not closing in the lock period, and the risk that rates may rise or fall in the future.
Please note that once a buyer decides to lock in their rate, if the closing takes place beyond the rate-lock period, they may have to pay substantial fees to the bank in order to maintain a loan through the closing date. Some banks do not even provide extensions past a certain point – each bank has different requirements and costs. The decision of when to lock in is obviously a personal one. However, we caution that the closing is not “set in stone” until after the buyer has been approved by the board, and even at that point, the sellers have the right to push the closing date back under a number of circumstances.
Please contact our office if you have any rate lock related questions, or wish to discuss your personal circumstances further.