How locking in an interest rate works!

How locking in an interest rate works!

Rates don't move just daily, they move when ever the 30 year mortgage bond moves 12 points or more. This will cause the rates to go up or down. Lets say bonds went up 5 points Friday, Monday another 5 points, and Tuesday 2 or more points, we then would finally see an improvement in rates by approximately .125% in rate. The same works the opposite direction. Sometimes we get a 12 or more point change in bonds all in one day, that changes rates as well. I hope this has helped!

A buyer can lock a rate as soon as there is an address and closing date to lock against. We lock the buyers social security number, name, address, and number of days to close, all in a lock. If the buyer does not close within that time, there is a fee to extend the lock. "Even if rates improved during the lock period, the lock extension fee applies." The investor sees both sides of the coin, so if rates worsened, they still only charge a small extension fee. Once locked and rates improve, the buyer can not change the rate. Same goes for the investor. If rates worsen, the investor can't call,and want you to pay a higher rate. Again, this works both ways! So, I always want to be sure the buyer wants to lock know this information. I work hard providing the best information available to my buyers on market conditions.

Again, I hope this information is beneficial to you. I encourage you to call for any additional explanations, or information.

Brett Swearingen

918-230-8535