A question regarding Mortgage Interest Lockup period (Charlotte: real estate, 2014)

[NEWCHARLOTTE]

Can anyone tell me how soon are we able to lock in the mortgage rate if we are considering a new built house. The rep I am going with now told me that they can only lock in the rate within 6o days of closing and not now. My concern is I am signing a contract with them now and what if the rate goes up by that time and I will be stuck with them and won't be able to shop around.

Is there any way to avoid this? Am I able to lock in the rate right now for a house that will be finished in March??

Really getting confused with this whole process.

Thanks in advance for your answers.

[aquafish41]

I'm going through the new mortgage process now on an existing home (not new construction) and the rate lock period is 60 days.

[momtothree]

If you are truly worried and can afford it. Look into getting outside lending where they do it as a construction loan. You make payments on whatever money that has been lent out in stages. Most builders however probably won't accept this. You can also close on your loan now and make payments till you move in.

Otherwise you are out of luck.

[frewroad]

I wouldn't worry about interest rate locks if I were you. The Federal Reserve absolutely can't raise interest rates without destroying the potemkin economy that we are in now. (you should also consider this before signing the dotted line on a place that will immediately lose value because of it)

[NEWCHARLOTTE]

Originally Posted by momtothree

If you are truly worried and can afford it. Look into getting outside lending where they do it as a construction loan. You make payments on whatever money that has been lent out in stages. Most builders however probably won't accept this. You can also close on your loan now and make payments till you move in.

Otherwise you are out of luck.

Huh, had not heard of this type before wouldn't be able to afford it but interesting to know such a loan exists.

[NEWCHARLOTTE]

This is getting way to confusing Why can't things be simple; lock the rate and sign the dotted line before construction; go thru closing (w/no surprises) and just move in; is that too much to ask ???

[momtothree]

How else will they make money? Lol But I hear you, I went through the same thing back in Florida when we were buying our new house. And back then the rates where fluctuating alot more too. These were the options given to us if we wanted to lock them in. Good luck!

[NEWCHARLOTTE]

Well here's what we found out so far. There are companies who will offer you a 4 or 6 mth lock in period for a new built but (and here's the kikker); they charge you an additional fee for it like the one I called will charge $500.00 to lock for 4 mths and their interest rate is higher 3.75 instead of 3.35. So either way you look at it you will PAY, PAY, PAY

[lovesMountains]

Originally Posted by NEWCHARLOTTE

Well here's what we found out so far. There are companies who will offer you a 4 or 6 mth lock in period for a new built but (and here's the kikker); they charge you an additional fee for it like the one I called will charge $500.00 to lock for 4 mths and their interest rate is higher 3.75 instead of 3.35. So either way you look at it you will PAY, PAY, PAY

Sorry to say, this is pretty standard. That being said, I don't think we are going to see much of a jump in rates until further into 2013, if then.

[frewroad]

The Federal Reserve has stated that it will be printing $40B/month (out of thin air) and using the money to purchase mortgage backed securities issued by the banks. They plan to do this at least through 2014. They are doing this because they can't make interest rates less than 0%. (the rate charged to banks, not you)

Therefore, mortgage rates will not rise so there is no need to pay for any locks.

What should be more worrying to people are the long term effects of all this money printing and what it does to real estate, especially new real estate, when the money printing stops.