Should I lock 30 yr fix now?

[jeebuss31]

I know the 30 yr fix is rising and rising fast. Since we're building, we still have a good 6 months to lock into a rate. I know it's hard to predict the market, but should I lock my rate now or just float until November? I was looking at some of the 30 yr fix trends for the last 3 years and normally after it peaks for a couple month it'll drop. Graph

[responduser]

I know the 30 yr fix is rising and rising fast. Since we're building, we still have a good 6 months to lock into a rate. I know it's hard to predict the market, but should I lock my rate now or just float until November? I was looking at some of the 30 yr fix trends for the last 3 years and normally after it peaks for a couple month it'll drop. Graph

I would suggest you to float until november.

[b4freedom]

I would have locked in last week. The fed has stated that they don't intend to go any lower due to inflation pressure. If inflation continues they'll have to increase rates. And, the way we're printing dollars, I think inflation will continue.

[safari]

The Fed rate does not directly affect 30 year fixed rates. The Fed may raise the rate, but 30 year fixed mortgage rates may go down.

[noppenbd]

Some lenders will let you lock with the option to float down for a fee. This might give you a hedge in case rates drop significantly.

[b4freedom]

It may not directly affect the rates charged by banks, but it still plays a big role. Furthermore, the growing lack of liquidity is keeping rates higher then in the past.

Check out this tool:
Graph the Trend from bankrate.com (tm):

[ceejay74]

What is this locking you speak of? Is it something I can do for my refi? I've got an adjustment coming up in November and was going to wait and see what it adjusted to since rates were so low, but if I could somehow lock in a relatively low fixed rate for November now...

[myrdale]

ceejay74, it is sort of like getting the bank to quote you on a mortgage. There is some time limit. Is this correct?

A co-worker of mine had his rates "locked in" then during closing the bank forgot / screwed up the paper work and raised his rate by a little bit. He refused to close on the house since the bank screwed up.

As far as when should you lock in your rate? I'd say when your seriously prepared and ready to purchase a house. A year from now rates could be higher or lower. It really is a gamble sitting around waiting on it, I am not a fan of that. Nor am I a fan of justifiying rushing out and doing this because they may go up.

[jeebuss31]

Well right now we're going through 3rd federal savings. Since our building process will take atleast 6 months, we have the option of locking now or wait. If we lock now, we have to put 1% of the loan and the 1% will go towards closing. I got the contract right when the rates moved up and I'm going to wait until November or December.

[braxton]

Hey jeebuss -

I went through the same dilemma of switching to a 30 year fixed mortgage awhile back when my 3/6 ARM came time to adjust. I ended up choosing the option refinance to a 30 year fixed rate loan and am saving a considerable amount of money.

[braxton]

PS - you can check out my post about my refinance to a 30 year fixed rate mortgage if you'd like