Now’s a good time to get a mortgage rate hold – The Mortgage Gal

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Get a mortgage rate hold

Head Tracy – | History: 357048

Fixed mortgage rates are on the rise. Do not panic.

I will say that if you are seriously considering buying in the next few months, now is probably a good time to hold a rate in place.

What is a rate hold?

When I work with clients, I work on a pre-qualification. We often use the terms pre-approval and pre-qualification interchangeably, but it’s important to understand the difference.

Pre-qualifying means I do a deep dive into my clients’ finances to see what they are eligible to borrow based on their overall picture. I look at the amount and type of income, any debts owed, and the amount available for down payment.

We spend time going over the home buying process, the timeline for each step, and what they need to move forward. If the rates are relatively stable, I won’t always get a rate hold because that means I have to pull the credit bureaus.

I’m cautious about getting credit unless customers shop seriously because if too many lenders pull your credit too often it can cause your score to drop and make you seem like an avid seeker. credit. When the market rumbles about upcoming rate hikes, I will go ahead with rate locks more often.

A rate hold is a bit like a guarantee from a lender that, provided everything is verified as stated in your application and the property you are writing an offer for meets the lender’s approval, they will honor your rate. rate hold even though rates have risen in the meantime.

Most lenders offer 120-day rate holds, which provides some comfort if you’re shopping for a home and worried about rising interest rates.

Your new mortgage loan must be concluded within the 120 day period. Some people think that as long as you write an offer within the 120 day period the rate hold will apply, so it is essential that you understand the important dates you are working with.

Customers often think of a rate hold as pre-approval. It’s not always the case.

Most lenders have automated programs that assess rate hold requests. As long as the information entered into the application meets their criteria, a rate hold is put in place. Most lenders do not review pre-approval applications (some require an underwriter to do a quick review) or supporting documents.

Most concerning to me is when I chat with clients who have received pre-approval from an online program and rush to write an offer, thinking they have their financing in order.

If you’re considering buying a home this spring, I encourage you to contact a mortgage professional to discuss your situation so you can have your ducks in line when the right home hits the market.

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