Getting Locked!
The current economic crises has the stock market going crazy and the bond market too. Mortgage interest rates are affected by the bond market so as you can imagine rates are going crazy from one day to the next. One day last week we were seeing VA 30 year fixed at 5.875%, the next day the stock market tanked and rates went to 6.5%! On a $200,000 loan that is an $80 difference in your monthly payment.
Rate locks offer you the protection of a set rate that won’t move while you shop for a home. When you apply for a VA loan, you can opt to have your rate locked, or let it float for a while. When rates drop as they did today (5.75%), you can lock that rate in so its guaranteed. Once you lock a rate you have to close on a home within 15-30 days (ask your loan officer the exact time window). If you don’t close on a home within the window provided, you lose the rate and the current rate will apply.
We recommend all military families looking to buy a home in the very near future to apply now, and get pre-approved. Then ask your loan officer what rates have been doing. He or She can tell you what the rates have been doing and can advise you when you may want to consider locking in. Just because the rates dip one day doesn’t mean they will be as good the next.
