Mortgage and Real Estate Blog

If you are in the middle of trying to refinance, one of the toughest questions people are presented with (and your mortgage consutant, too) is "Do you want to lock in your interest rate?"

A rate lock is your time to guarantee your interest rate will not go up.  It does not usually protect you from the interest rates going down (unless you take a floatdown option with your ratelock- Floatdowns usually have a higher initial interest rate at the time of the lock, but if rates go down you can re-lock with the same lender at the lower rate)

There is no "blanket" answer as to when the right time to lock is.  Here are a few things to think about.

Are you a gambler?  - I reference this, because letting your rate float as you proceed through a loan can have great rewards.  If rates are on a downward trend, this can potentially save you tens of thousands of dollars in payments over the life of your loan.  But remember the word "POTENTIALLY" as if interest rates go up, the reverse happens.

Will the thought of not knowing what your rate will be make you nervous? - It is not worth losing sleep over what rate you are getting.  If you are the type of person who is nervous, I suggest locking the moment you think the mortgage is worth doing.  Don't be miserable during the process.

How are you getting your advice on what to do?  Are you trusting an aquaintance at work? Your next door neighbor?  The word of the guy behind the counter at your coffee shop?  No one can give you advice that will always be correct.  Market influences change daily, and a financial professional who watches stocks, bonds, and the security markets will have a better idea of what to tell you based on current market trends.  Trusting
Uncle Phil who saw something on the news yesterday to make a huge financial decision like this is not the one to listen.

If you want a source for these answers, I can offer you a daily update on my website for free- no signups, no email addresses, just follow the link to www.athomemortgagecompany.com/DailyRateLockAdvisory and you can get input written by market professionals based on the information that really determines what happens to mortgage rates.  It's not a guaranteed correct answer, but you can see what we watch to determine what is going to happen to interest rates.  Remember, as a mortgage professional, knowing what is going on determines my business.  This is not just a hobby or based on something I heard on the World News.  This is what professionals look at.

Hope this helps!

Many homeowners over the past few years have used the equity in their homes to do work to their houses, consolidate debt, pay for college, etc..  As many people are finding now, though, accessing this equity is not as easy as it used to be.

Not only have lenders become stricter in regards to proving your income, but they have also dropped most 100% cash out loan programs.  Many loan programs also have limits as to how much cash you can take out (cash in hand) that is not used to pay off debts.

What does this mean for you?

You need to be aware of what the limitations are.  Using a Mortgage Broker who works with many different lenders (see broker versus bank page on my site) instead of just going to one bank can greatly increase your chances of finding a program that will suit your needs.  They have access to many different loan programs from many different lenders.

However, don't make plans before talking to your mortgage professional.  They will be able to give you guidance pretty quickly to tell you if your needs are reasonable in this market.

Also, the options of keeping your first mortgage and just taking out a second mortgage are also tougher.  Make sure you talk about refinancing your whole mortgage- even if the rate goes up a little bit from what you have, the payments and interest rate can still end up better than the blended rate on taking a second mortgage at a much higher rate.  Not to mention, making your equity work for you can be greatly beneficial, no matter what the rate!

If you listen to the news, watch TV, or read the newspaper, chances are you have heard about the "death" of the mortgage industry.  If you listen to what they say, you would believe there is a shortage of loan programs.  This is truly not the case.

Although certain markets are becoming tougher to get a loan for (stand alone 2nd mortgages, home equity loans, and low documentation loans for investment properties) the market has, in many ways, improved for people looking to buy homes for their primary residence, and especially for first time home buyers.

Fannie Mae, Freddie Mac, and the US department of HUD (Housing and Urban Development) are all working to try to find a way to help out current homeowners who are on adjustable rate loans whose rates are going to change (driving payments WAY UP).  What they have done is worked to create lending solutions for borrowers who may not have the greatest credit to have a way to obtain better mortgage financing. In a time when the media has you believing the "mortgage world" is coming to an end, major government agencies, government employees, and the GSE's of Fannie Mae and Freddie Mac are actually coming out with better loan programs than they have ever had before!

Cbeck out the rest of my website for Connecticut Mortgages at www.athomemortgagecompany.com - and watch for future posts about the state of the mortgage industry.