When you’re taking out a mortgage loan to buy a piece of land in North Florida, your lender will most likely offer you a chance to “lock in” your mortgage rate.
But what does that mean – and when should you do it?
Here’s what you need to know.
When Should You Lock In Your Mortgage Rate?
A mortgage rate lock can help you save some money on your monthly mortgage payments – and over time, that cash can really add up.
What Does It Mean to Lock In Your Rate?
A mortgage rate lock is an agreement that says your lender will charge you a specific rate and price on your mortgage. It only lasts for a set period of time. If you sign the dotted line outside that time, your rate could change – or you could be subject to fees to extend the lock.
When to Lock In Your Mortgage Rate
Locking in your interest rate can be a smart move if:
- Mortgage rates are rising
- The current market supports a rate and payment that would save you money
- You have enough equity in your home if you’re refinancing
In many cases, you can lock in an interest rate up-front, right when you apply for the loan. If you do that, your lender will base the interest rate on your loan program and price point rather than on an appraisal.
Alternatively, you can lock in your rate at appraisal. That could be a better idea in some cases, so it’s important that you talk to your lender about the differences here.
Are You Buying a Home or Land for Sale in Lake City?
If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.
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