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Letter of Approval, lock in rate?

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  • Letter of Approval, lock in rate?

    The wife and I are looking for a home after leaving the city. we have a time frame of about 12-18 months ideally, but could move anytime between now and then (one kid in school, second on way). Our budget is set, Down payment saved, and we feel comfortable to spend what we need to in this HCOL area. That said, we have not found a home yet that we are in love with, and given we don't have the pressure to move, we aren't lowballing offers yet on random homes.

    My question is two fold:

    1. Should we obtain a pre-certification letter of approval now or wait till we are more serious on a specific home?

    2. Is it advantageous to lock in a rate now for a potential jumbo loan? that would certainly cost us, but given the increasing rates, is it worth it?

  • #2
    1-  Wait until you narrow down the exact location\ neighborhood and possibly specific home.

    2- I think even if you lock the rate you are still going to pay for lock rate.  You are usually paying extra for locking the rates more than 15,30,45,60 etc. Since you are not in a rush you can save more for your down payment but shop again when you are ready to buy.

    This is a good site to follow in general about the rates etc.

    https://themortgagereports.com/

     

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    • #3
      Rates have been moving strongly, tomorrows unemployment report is going to be important for further direction.

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      • #4
        I wouldn't do anything yet with such a long horizon.  A pre-approval letter from a year ago isn't go to mean anything to anybody.

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        • #5
          I was under the impression most pre-approval letters have a short lifespan. Mine was good for about six weeks. I always thought the short life span was an industry standard.

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