Locking in Loan rates right now a good thing?

Should you lock in the interest rate on your mortgage? Here is something to consider.

The pending lowering of the maximum loan amounts (slated for October 1st) that can be sold to FannieMae, FreddieMac and GinnieMae (in high cost areas from $729,250 to $625,500 for single family homes) will create more “Jumbo Loans”.  Jumbo loans have historically been .25% to .375% higher than conforming loans; however, industry insiders are hinting at a much bigger spread (.75% or more).  Although this may not impact most home buyers as much, it is worth noting.

What is the benefit of not locking interest rates?  The rates could go down an eighth or a quarter of a percent.  Is that worth the risk of a rate increase that would be quick and dramatic of a half of a percent or more?

The safe bet may be to LOCK to protect yourself from rising rates in uncertain times. As the old saying goes, “it is better safe than sorry”.


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