New home buyer - mortgage question

[canadianoutlaw]

We are getting ready to buy our first home. This isn't really a question of rent versus buy which has been discussed in detail in prior threads and posts.

Our closing date may not be until the end of May. With interest rates possibly rising, I'm wondering what folks think about trying to lock up a rate at 90 days in advance, which seems to be a little unusual. I dont have a great sense for the cost involved and how this is accounted for. We plan to shop around (for mortgages) soon. Does anyone have any thoughts or experience with trying to lock in a rate greater than 60 days in advance? Apologies if this topic has come up elsewhere but I haven't seen it. Thank you!

[StarTrekDoc]

More the issue would be would the seller want to wait 90 days for closing.  3 months is a LONG time in many markets.  You're narrowing your potential homes when the requisite is a 90dy lock

[canadianoutlaw]

StarTrekDoc wrote:

You’re narrowing your potential homes when the requisite is a 90dy lock

Click to expand...

Thanks for the response. Are you able to elaborate on these ideas?

Update: we are under contract with closing date at the end of May. So we are indeed looking at 3 months for closing

Would also be interested in hearing general preferred strategies for finding a mortgage.

Thanks!

[Neuro-doc]

@canadianoutlaw, which side of the Canada-US border are you on? The rules will be different in each country.

[canadianoutlaw]

Neuro-doc wrote:

@canadianoutlaw, which side of the Canada-US border are you on? The rules will be different in each country.

Click to expand...

Thanks - we are US.

[q-school]

don't you have a mortgage broker or loan officer who can give you the specifics?

I think we have always had some kind of rate lock included (can't remember if it was 30 day or 60 day).  sometimes one free reset if rates wandered down.

in the end, it probably isn't going to be worth the time you are thinking about it.  the rates never wandered by more than 1/2 point and usually just 1/8 or sometimes 1/4.  with the size of the mortgages and the accelerated pace people here tend to pay them down, it works out to less than $100 per month usually.

good luck!

congrats!

 

 

[hightower]

I don't believe any lender will let you lock in a rate for that long.  I could be wrong, but I believe the longest rate lock would be 30 days.  I am closing on a refinance tomorrow actually.  Got a 15 year loan at 3.25% and they locked it in for 30 days.  They were rushing to get it closed by tomorrow so the rate didn't expire.

Rates are rising quickly at the moment.  My 3.25% rate is no longer available and most 15 year rates are around 4% right now.  So, if they do let you lock it in for 90 days, then go for it. I think more likely they will let you lock it for a shorter time then allow for a choice of a 1 time adjustment before the end of the 30 days (if rates happen to go down).  I know I've been offered that in the past with refinancing.  Talk to your broker today

[canadianoutlaw]

Thanks for the insightful responses!