“The steady climb in mortgage rates shows no sign of slowing down.”
That’s what The Wall Street Journal reported a day after the Fed raised its funds rate – the amount banks pay to borrow money from each other overnight – another half point from the previous quarter point increase it instituted earlier in 2022.
While the Fed rate doesn’t directly determine mortgage rates, the two tend to move in the same direction, and this time was no exception. The average rate for a 30-year fixed-rate home loan rose to 5.27% – the highest level since 2009 – shortly after the most recent Fed rate increase.
With more Fed rate increases expected in the coming months, some people are considering putting their homebuying plans on hold during the traditionally busy spring and summer housing markets. But you don’t have to, thanks to our rate lock options.
What is a mortgage rate lock?
A mortgage rate lock allows you to avoid future rate increases by locking yours for a specific period of time while you look for a home or complete a transaction on a home you’ve already selected. At Homeowners Financial Group, we offer these rate lock options:
Lock & Shop
With this option, we can lock the rate on a loan for free so you can shop for a home with confidence in a volatile market.
- 90-day rate lock with no upfront fee required!
- You must be under contract for a property by the 60th day of the lock.
- The lock can be changed or extended once you are under contract (additional fees and other restrictions may apply).
- 30-year fixed-rate conventional and government loans are eligible.
- Owner-occupied properties only.
Long-Term Locks
After you’ve found a new home, received your loan estimate, and expressed your intent to proceed with the transaction, we can lock the rate on a mortgage for up to nine months in advance of your closing date.
- Lock periods of 180, 210, and 270 days are available.
- Conventional (Conforming and High Balance), FHA & VA (Conforming and High Balance), and USDA loans are eligible (additional restrictions apply).
- Each lock includes a Free Float Down to protect you if rates go lower than your locked rate within 30 days of closing.
- Upfront fee applicable to closing costs is required (refundable if the loan is declined; not refundable if the loan is withdrawn):
- 180-day lock (6 months): Fee is 0.500% of the loan amount.
- 210-day lock (7 months): Fee is 0.750% of the loan amount.
- 270-day lock (9 months): Fee is 1.000% of the loan amount.
As an individual borrower, you can’t control fluctuations in mortgage rates or the Fed rate, and it’s almost impossible to time the housing market so your homebuying needs line up with ultra-low rates like we saw a couple of years ago.
What you can do is minimize the impact of rising rates with any of our rate lock options that can help you save thousands on mortgage interest over the life of a loan. Contact a Homeowners Licensed Mortgage Professional today to see if a rate lock is right for you!
