Posts Tagged with borrowing

A Great article from my friend Monika over at Benchmark Lending. Borrowers and Mortgage "Getters" this is for you:

Another frequent question borrowers ask is "When should I Lock my loan?" What sounds simple is actually not so simple. Here some things to consider and discuss with your loan officer:

What's the market saying about the future of rates? As discuss before, mortgages are bundled and sold into the secondary market as Mortgage Backed Securities (MBSs). As such, MBSs are investments that need to attract investors. Because there is a finite amount of cash in the world, many different investments (stocks, bonds, commodities, etc.) are all vying for those monies. So, a simple guideline is bad economic news (that would scare people from the stock market) like high unemployment or country's defaulting in Europe, drive the money into MBSs. More people want to buy MBSs, the lower the rate of return, those investors will demand...and therefore, lower rates. Brush up on your economic knowledge, or better yet, work with a loan officer who can help you. The duration of the lock. Most lenders can offer you a variety of lock periods (typically 7 days, 15 days, 30 days, 45 days and 60 days are the most common). The shorter time period you lock for, the more aggressive a lender can be with pricing; therefore, waiting can be beneficial. The duration of the lock- Part 2. When deciding how long a lock to take, try and make sure your projected closing date is accurate. Ask about any underwriting and title issues that may be outstanding, as well as confirming that your seller is on the same page. The duration of the lock- Part 3-Even if you believe 30 days is a comfortable time for your loan to close, ask your LO the difference in price for a 45 (or even 60) day lock.