Now that the budget standoff has ended – at least for the time being – home loan borrowers shouldn’t dilly dally waiting for mortgage rates to fall, according to industry experts.
Mortgage rates, which inched upward as the federal budget deadline loomed closer, don’t show signs of falling again, according to Keith Gumbinger, an executive at financial publisher HSH.com.
“If you have a mortgage deal in place that makes your transaction work, go get it and lock it in,” Gumbinger told the New York Times. “No one can be certain what will happen in the future.”
Locking in an interest rate on a loan ensures that it will not change, regardless of market conditions, as long as the borrower closes on the loan within a predetermined lock-in period, according to the newspaper.
To be sure, lenders won’t commit to a rate lock until a borrower has a home under contract or has a signed offer, John Adam, a home loan sales executive at Bank of America told the Times. But a borrower should go ahead and get prequalified for a loan in the meantime so that they can quickly address issues down the road. [NYT] – Hiten Samtani