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For many people, owning their own home sounds like the pinnacle of the American dream – but for some, the home buying process may feel like more of a nightmare.
With all of the paperwork, applications, pre-approvals, inspections, appraisals and other hoops to jump through, buying a home can feel like a daunting task. Thankfully, with the help of a good mortgage lender, the process doesn’t have to be so painful.
One of the most difficult aspects of homebuying is timing the market right – you want a good price for your home, but you also want to lock in a low interest rate. But what happens if rates change while you’re still shopping around?
According to Bankrate, waiting to buy a home while interest rates are low could be a very costly decision. Even a difference of 0.5 percent on an interest rate can add up to tens of thousands of dollars over the life of a loan.
A good way to potentially save thousands of dollars is through a lock-and-shop mortgage.
What is a lock-and-shop mortgage?
If you’re worried about missing out on a lower rate while you’re shopping for your dream home, a lock and shop mortgage may be right for you.
Most lenders offer a mortgage rate lock, which allows you to lock in today’s interest rate for a limited time. This gives you peace of mind that your interest payments won’t go up even if interest rates climb before closing day.
Some programs also allow for a float down, explains Bankrate. That means if rates decline within a specified time after you lock, you can lock again at the lower rate. This provides you with the security that you won’t get stuck with a higher rate even if rates go up before you find the home you want.
When would be a good time to get a lock-and-shop mortgage?
According to Investopedia, it’s a good idea to get a mortgage rate lock float down if interest rates have been fluctuating over the last several months or even the past year.
Because this can be a difficult thing to predict, you should check with mortgage lenders to see whether or not they believe interest rates will rise or fall within the next few months.
Choosing the right mortgage lender
Even the most seasoned homebuyers can become overwhelmed as interest rates fluctuate and government regulations are constantly changing, so it’s important to have a good mortgage lender to guide you through the process.
If you’re looking for an easy and comfortable home buying experience, the professionals at Veritas Funding can help.
At Veritas Funding you’ll receive exceptional service from a team of professionals dedicated to helping find the best solution for you. Whether you are purchasing or looking to refinance your home, you can trust that your loan will be handled with care and competence.
Visit the website to find a branch near you today.