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  • Lock or float

    My offer to purchase a yet-to-be constructed house has been accepted by the builder. The construction will only be ready in 6 months later.

    My bank is asking me if I would like to lock the rate at 4.25 percent by paying a premium fee of 1.25 percent of the total cost of house vs 0.25 percent interest rise or let it float.

    I was hoping to get some advice based on the current climate. I am a first time home buyer

    Thanks

  • #2
    Can you ask for another bank?

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    • #3




      My offer to purchase a yet-to-be constructed house has been accepted by the builder. The construction will only be ready in 6 months later.

      My bank is asking me if I would like to lock the rate at 4.25 percent by paying a premium fee of 1.25 percent of the total cost of house vs 0.25 percent interest rise or let it float.

      I was hoping to get some advice based on the current climate. I am a first time home buyer

      Thanks
      Click to expand...


      Let it float and get a lower rate on your mortgage by going to

      https://www.zillow.com/mortgage-rates/

      Looks like the best mortgage rate listed is 0.40% lower than your bank's rate.

      -WSP

      Comment


      • #4




        My offer to purchase a yet-to-be constructed house has been accepted by the builder. The construction will only be ready in 6 months later.

        My bank is asking me if I would like to lock the rate at 4.25 percent by paying a premium fee of 1.25 percent of the total cost of house vs 0.25 percent interest rise or let it float.

        I was hoping to get some advice based on the current climate. I am a first time home buyer.
        Click to expand...


        Nobody here can predict what will happen in the next 6 months, year, or beyond. That's like asking for a weather forecast months from now; advice based on the "current climate" is strictly opinion. Given that, however, I agree with  Dicast and  WallStreetPhysician that you should keep shopping. "A premium fee of 1.25 percent of the total cost of house" is not a good deal, imo.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #5
          Float it.

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