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Rate lock for 270 days
- Thread starter JCnOC
- Start date
JCnOC said:Hi,
What is the current best rate lock for 270 days? Just bought a new house , nd it won't be already until June 2016.
Am trying to lock the rate now, so I can be worried free because Ia possible rate hike by FED in December.
Any advise would be much appreciated it
Which community?
JCnOC said:Not yet but would like to know the best options in advance. I'm also discussing with other banks as well. Want to see the best optim that I can get. Is it better to use home builders preferred lender ?
Are they going to give you anything to go with the prefer lender?
JCnOC said:Beacon Park in Irvine.
Ellwood?
Perspective
Well-known member
JCnOC said:I spoke to one of the lenders that I got qualified and they told me its 0.6 points last week. I'm not quite sure if that is good or bad.
In late August, I paid Wells Fargo a 3/8ths lock fee (0.375%) for a 190 day lock, but it came with a 1/4th rebate at closing. So, the extended lock fee was basically a net eighth (0.125%). It also came with a one-time float-down option sixty days out from closing, which we exercised this month.
I'm providing the details, because the price of the lock is important, but what you get for that price is just as important. Will you be paying 0.6% with no rebate and no float-down option? Does that extended lock come with high origination fees too?
Perspective
Well-known member
JCnOC said:Thanks for the feedback, Perspective. I'll be having a meeting with the lender this Friday and will provide more detail. Still so wondering if 270 day rate lock makes sense or not. Just wanted be sure I Can get the best rate when closing in June next year.
A 270-day rate lock makes perfect sense, at the right price and terms. My tea leaves suggest the 30-year fixed rate jumbo mortgage will remain within the 3.75%-4.25% range in 2016. I think there's a low probability (20%?) that it pushes into the mid-4s. I think the probability it pushes above 5% is extremely low, but it's worth some cost to protect against this outlier.
I'd pay 5/8ths today (assuming no credit at closing) to lock ~3.75% for nine months, especially if the lock comes with a float-down option. I am risk averse.
irvinetalker
New member
It would be good to get a quote from three lenders and compare. The big lenders should all have pricing for long locks. For example, Bank of America has the "Builder Rate Cap". Dimensions to compare:JCnOC said:I spoke to one of the lenders that I got qualified and they told me its 0.6 points last week. I'm not quite sure if that is good or bad.
- upfront lock fee
- add on rate
- is there a float-down option?
- is the upfront lock fee refundable if the loan is denied?
- is any of the lock fee refunded if the loan funds?
- are you still subject to guideline changes, or do you have pipeline protection?
It's may be worth asking: will the builder cover the lock costs?
Good luck!
Thanks for the great advices!
Will compare and decide after. I didn't use the builders preferred lender because when I signed up with them. One of staffs told me I had get prequalified before signing up with them. I found out from one of staffs after signing the contract. Wonder if it is worth to use them as a lender.
Will compare and decide after. I didn't use the builders preferred lender because when I signed up with them. One of staffs told me I had get prequalified before signing up with them. I found out from one of staffs after signing the contract. Wonder if it is worth to use them as a lender.