Member Since 2004

When Should I lock in My Rate?

Mortgage Rates Chart

Most borrowers are looking to time the market perfectly to get rates at their lowest point, which is absolutely what we want as well. That said, locking at any point in this market is not a mistake. Saving 1/4% on your mortgage rate lock is not what is going to secure your retirement dreams. We really want to put the focus on the best long-term solution for you, which includes the correct mortgage.

REMEMBER, the most expensive part of your loan is the TERM. Just by selecting a 25 year term on a $200,000 mortgage we can save $31,000 in interest paid and not owe the $60,000 that your 30 year loan would have remaining after 25 years. All for an extra $93 per month or $28,000 over 25 years. You save $91,000 for just sending in an extra $28,000.

Can't I save money by just sending extra? Mortgages are not simple interest loans. Call your lender and ask them for the proof that sending extra to principal will reduce next month's interest due. It won't. Only an adjustment to the term will result in this type of savings. Sending extra will pay the loan off early and save interest cost, but it is at the end of your loan, not now.