Mortgage rate lock

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Tom_Irvine_Guy

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We have to decided to go with new construction, but it won't be ready until end of December 2014.

I am wondering what interest rates would be like in December 2014 , I hope they will stay low, to current level at least.

My questions are:

1)Has anyone been in this situation?
2)Wells fargo is preferred lender used by builder, they are doing six months lock but at Higher interest rate.  Any suggestions, should we lock the interest rate now or wait until NOV/December. 

Thanks a lot for your help people.
 
Good questions, never been in this situation, but would love to hear what others on this forum think. Congrats on your new purchase
 
Most lenders won't lock a rate until 60 days out without points. Some will let you pay a few thousand extra for a float-down option - to reset your locked-in rate again at a later date.

No one knows what rates will be in December. But they are very unlikely to rise significantly in the short term, so you are still getting an historically low rate, even at 4-4.5% on a 30-year fixed.
 
I wouldn't lock this far out. Rates probably won't move much as others have said. And if they do rise they will likely dip due to uncertainty about something TBD such as something in the Middle East, Ukraine, etc. then you can just refi
 
qwerty said:
I wouldn't lock this far out. Rates probably won't move much as others have said. And if they do rise they will likely dip due to uncertainty about something TBD such as something in the Middle East, Ukraine, etc. then you can just refi
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USCTrojanCPA said:
qwerty said:
I wouldn't lock this far out. Rates probably won't move much as others have said. And if they do rise they will likely dip due to uncertainty about something TBD such as something in the Middle East, Ukraine, etc. then you can just refi
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+1
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+2
 
We pre-qualified with Wells Fargo cause that's what the builder wanted.  Then we shopped around with other banks.  When you have the pre-qual from Wells Fargo, you can take that to other banks and you can even go back to Wells Fargo and show them other offers and they will try to match the best.  Compare side by side fees including appraisal.  The appraisal fee at Wells Fargo was outrageous.
 
I got pre-qualified with Wells Fargo and they gave me a crappy FNMA rate which had a max loan of $625,500 and was going to charge me 1% to lock for 6 months.  I ended up going with an independent mortgage broker that gave me the most competitive rate and no charge to lock the rate (at the time I was just over 90 days to close).  If you would like a referral, please contact me directly.
 
If the credit comes directly from the builder,  then it's a deal. The in-house lender is just like any other bank/mortgage banker/broker, offering a credit based on the rate you choose.

In most of the SFR / Detached Condo communities the in-house lender capture rate is sub 50%, higher though in attached condos because of phase approval issues. Buyer tend to see improved terms and greater loan options when some informed shopping takes place.
 
Soylent Green Is People said:
If the credit comes directly from the builder,  then it's a deal. The in-house lender is just like any other bank/mortgage banker/broker, offering a credit based on the rate you choose.

In most of the SFR / Detached Condo communities the in-house lender capture rate is sub 50%, higher though in attached condos because of phase approval issues. Buyer tend to see improved terms and greater loan options when some informed shopping takes place.
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Yeah, the builder's lender magically comes back with a better rate that they got a "special" exception from their manager once my buyers got quotes from outside lenders.  Funny how that happens.  haha
 
I would go with inhouse lender if it's a new home thru builder.  Bottomline, you want the home right?  Don't jeopardize it by going with outside.  Inhouse lender does have an advantage at closing if you're in worst case scenario.  And if they're at fault, you don't pay the daily penalties.  But do your due diligence, get some quotes and have the inhouse match/beat the competition.  You can always refi once you have the house.  If the inhouse lender is not budging, make sure you get a $0 cost mortgage, don't pay fees if you're gonna refi 3 months down the road.  And don't be lazy!  Refi that sucker soon!  Homebuyer due diligence/laziness generates profit for lenders.
 
ps9 said:
I would go with inhouse lender if it's a new home thru builder.  Bottomline, you want the home right?  Don't jeopardize it by going with outside.  Inhouse lender does have an advantage at closing if you're in worst case scenario.  And if they're at fault, you don't pay the daily penalties.  But do your due diligence, get some quotes and have the inhouse match/beat the competition.  You can always refi once you have the house.  If the inhouse lender is not budging, make sure you get a $0 cost mortgage, don't pay fees if you're gonna refi 3 months down the road.  And don't be lazy!  Refi that sucker soon!  Homebuyer due diligence/laziness generates profit for lenders.
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Better yet, sell points take a slightly higher rate and pocket the credit against your closing costs if you are gonna refi in 3 months.
 
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