Thanks in advance for anyone who reads. I am looking to understand if I'm missing something obvious about choosing between two banks/lock-in scenarios.
There are various lock-in scenarios offered by various large banks. The two banks I am considering offer the following:
- Bank1: Lock in today/ASAP, with 6-month lock, 1 point "deposit"
- Bank2: Lock in within 45 days of closing, with 60-day lock
The buying scenario is the following:
- new construction
- 4-5 months are needed to finish off the house being built
- Bank in scenario 2 offers small discounts (couple hundred dollars on fees, and 0.1% on rate)
- most other costs are a wash
- assume banks' service is a wash as well
I am assuming that the main consideration is which way I think interest are going, and so I should look at what risk I am willing to take on rate direction.
A second consideration might be that I will know better the closing schedule as the months go on, and so the Bank2 scenario gives me a better chance of making sure I'm within the lock window (vs. closing date) when I lock-in, thereby avoiding a fee to re-float.
A third consideration would be whether (assuming I wait until closer to closing) a much higher interest rate will affect the bank's perception of my ability to pay back the loan that they had approved me for.
But am I missing something else obvious as far as what to consider?
[By the way, if these are three things I need to consider and nothing else, then since I do not know which way rates are going, and I'm not a confident predictor of such, I'm thinking I should take the "sure" discounts and just go with scenario 2.]