Extended rate lock mortages (6 months)

[FreshTressa]

My new house won't be finished until August/September.

I keep reading rates are going up, and our mortgage company is offering us to lock in for 6 months...

The problem is is that they want 1% of the loan (about 3k) up front, non-refundable to do it.

Anyone know anything about this?

 

[redshoes]

We looked into doing this back in September with our new home. The issue with us was that by the time we paid all the fees that were associated with an extended mortage it negated the savings of a lower interest rate. Our mortage officer took the fees we would have paid and calculated what interest rates would have to be inorder for us to save any money locking in 6 months out. We are now locked into a mortage and we saved money by waiting. Another issue that we had was the mortage could only be locked for 6 months and at the time our home builder was unwilling to commit to the house being completed in 6 months time (which was a smart move on their part because we are heading into 9 months of waiting for our home to be completed). I'm not an expert at all concerning this so hopefully someone who knows more than me can give you some advice.

 

[FreshTressa]

Thanks!

I'm also worried about the house not being done, too. Guess we won't lock.

Cross your fingers for us the fed won't raise interest rates at their meeting tomorrow!

Any other advice?

 

[golfgal]

I know that Wells Fargo has a Shop, Lock and Roll program where you can lock into a rate and find a house and you can do one rate reduction during that time. I don't know if it works for building homes, but might be worth a call. Rates are most likely going to go up in the next six months.