QWhat Is The Best Strategy For Locking An Interest Rate For Refinancing My Home Loan? Should I Go With A Shorter Lock And Pay A Lower Rate, Or Opt For The Longer Lock With A Higher Rate?
ADeciding when to lock and for how long is largely a big guessing game. You can find predictions online by "experts" about what mortgage refinance rates are expected to do in the next few weeks. Many times, they are right but it's a bit like looking into a crystal ball so there are no guarantees. If you go with a shorter lock and pay a lower fee, you run the risk of your lock expiring before your loan closes. In this case, you could end up paying a higher rate regardless. If you go for the longer lock, you run the risk of rates dropping after you lock and you could be kicking yourself for locking too early. It is definitely a personal decision for you and based on how much risk you are willing to take on. No matter what you decide to do, just remember the important thing is to be sure you have an interest rate on your mortgage refinance that makes your payments affordable. If rates drop more, you could have saved money in interest but if they rise you could end up not being able to afford your house at all. Try to choose a rate lock that gives your mortgage broker a reasonable amount of time to close your loan. If they say it will take 30-45 days to close, go for the 45-day rate lock rather than the 30-day rate lock. Better safe than sorry.