Mortgage Loans- Understanding Rate Locks

  • : preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/baltimor/public_html/includes/unicode.inc on line 311.
  • : preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/baltimor/public_html/includes/unicode.inc on line 311.
  • : preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/baltimor/public_html/includes/unicode.inc on line 311.
  • : preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/baltimor/public_html/includes/unicode.inc on line 311.
  • : preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/baltimor/public_html/includes/unicode.inc on line 311.
  • : preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/baltimor/public_html/includes/unicode.inc on line 311.

Depending on the mortgage lender you choose, you will have several options when it comes to locking-in your interest rates and points. Here is what you need to know to avoid making costly mistakes when it comes to rate locks.

Mortgage lenders guarantee interest rates and points to allow you time to close on your mortgage. This guarantee comes in several different forms and the lender may charge you for it. Mortgage lenders offer guarantees in the form of locked-in interest rates and locked-in points, or locked-in interest rates with floating points.

If you choose the second option, your points could change before you close. Points are a fee you will be required to pay in the form of pre-paid interest to the lender, at the time of closing. One point is equal to one percent of the loan amount; if the lender changes your points because the guarantee did not lock them in, you could be required to pay more at closing. Floating points could work in your favor if market rates decrease before you settle; however, the risk could work against you.

Some mortgage lenders offer the option of floating
interest rates and points. If you think interest rates will go down before your settlement date, this option could save you money. Interest rates are extremely difficult to predict; if you have a low tolerance for financial risk you should avoid this option.

You can learn more about your mortgage options, including how to avoid common mistakes, by registering for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free guidebook today at:

http://www.refiadvisor.com

Baltimore Mortgage Refinance

Article Source: http://EzineArticles.com/?expert=Louie_Latour