Locking In a Rate

[Amanda]

Is it possible to lock in an interest rate before I've definitely decided which home I want to buy? And how long is the lock-in good for?

[John]

You can get pre-approved for a loan and lock in a rate but only for 45-60 days. If the closing is past that date you loose your lock. The fed just lowered the prime by 50 basis points so you do have time to get a good rate. Get a pre-approval from a lending institution and than find a home. When they ask about financing just tell them you will discuss that after you get a firm price. Although the salesman does not get a "commission" on the financing in some places they get something so I wouldn't mention I was pre-approved until after you get a firm price.

[rmurray]

Locks very from lender to lender..For free most of the lowest lenders will only lock the rate for 2 weeks...some will offer 30 to 45 days..but they tend to have slightly higher rates...In both cases longer locks are available for a fee..

I have one lender that locks the rate for 6 months...but they are about 3/4% higher than the lowest rate on the market today...

Rates are low now and there seems to be little upward preasure right now...There is no better time to buy a home than now...

The other message mentions preapproval...just be careful not to confuse an approval and a "pre-qualification"....A pre qual is nothing but a broker (or originator) saying they think they could do a loan..and the rate TODAY is ...%....

Shop your rate carefully and move forward soon..

[Don B]

Bob,
I understand there was just a rate cut. What did you mean when you said
"Rates are low now and there seems to be little upward preasure right now...There is no better time to buy a home than now..."

Upward pressure as in rates may start to creep back up?

[rmurray]

Yes...the rate cuts you hear about in the national press that the FED does has little effect on the long term rates...

Mortgage rates did ease a little (7 basis points last week..that is ,07%)...If the government continues to borrow and/or the stock market begins to rise..there will be up ward preasure on mortgage rates...

It is all supply and demand...if money goes to the government or move back to the stock market in large volumn long term rates could rise...

Of course..it I knew what rate would be in 6 months for sure...I would be in New York and very rich...

All I know is that..rates were at their all time low about 60 days ago...Now they are slightly higher..about 1/4%...There is NO time better than the present..when rates are lower than the last 40 years accept for 8 weeks ago...In the long term..rate cannot go much lower...They will have to go up in the future and housing costs will increase...

[Nancy]

I'm new at this....what is the going interest rate for MH's regarding a loan?

[rmurray]

Depends on how you buy..how much you have to put down and how good your credit is...
Mortgage loans for those with good credit and 5% down can be had for about 6.25%....No down mortgages might be about 6.5 to 6.75%....There are mortgages for those with challanged credit that do have higher rates...Those tend to have 2 to 3% higher rates..

Home only finance with small 5% down will be 10.5 to 12.5% depending on your credit rating..Larger downpayments can get lower interest rate down to 8.25% with very good credit and 20% down..

Remember 1% in interest for the average multisection home is about $ 15,000 in interest over the life of the loan...Also remember that some dealers use finance as a profit center and can get income from higher rates...Just be sure to shop finance as much as you would the home....Good dealers know who has the best programs out there and will help you...