Let’s Talk Lock, Benefits of Interest Rate Fluctuations and the Power of Knowledge

Locking in a mortgage rate with a lender is a great way to ensure that the rate quoted will be available when you close your loan. Rate locks are essential in mortgage planning.

This year has been highly chaotic in the mortgage and financial sectors. For the most part, mortgage rates have remained above the historic lows of 2003. However, this year we've seen several instances where rates dropped dramatically without warning-The information below illustrates the small windows of opportunity we have experienced over the past 12 months.

Fortunately, these ultra-brief windows allowed us to help several of our clients save money on their mortgage and secure a solid plan for the future.

A rate-lock, or lock-in, is a lender's promise to hold a specified interest rate for you for a pre-determined period of time while your loan appli­cation is processed. Due to the volatility of the market, many lenders are also offering a rate renegotiation policy to assure that the borrowers have an opportunity to renegotiate their rate should the market improve and lower interest rates become available.

Knowledge is Power -be sure to ask your mortgage professional BEFORE YOU COMMIT about their lock policy and more importantly, renegotiation policy. Interest rates change daily and in these volatile times several times per day.

What Happens If the Lock-in Period Expires?
If you don't settle within the lock-­in period, you might lose the interest rate This could happen if there are delays in processing whether they are caused by you, others involved in the settlement process, or the lender. For example, your loan approval could be delayed if the lender has to wait for any documents from you or from others such as employers, appraisers, inspectors, builders, and individuals selling the home. If your lock expires, most lenders will offer an extension of the lock for a small fee. To protect yourself ask questions of your mortgage professional as to lender turn times, etc. We have experienced lenders offering a great interest rate only to find that their processing departments are so bogged down with new guideline requirements, that the closings are being delayed requiring extensions.

Knowledge is Power - Ask your mortgage professional BEFORE YOU COMMIT about lender turn times.

How Can You Speed Up the Approval of the Loan?
Much of the information required by your lender can be brought with you when you apply for a loan. This may help to get your application moving more quickly through the process. Be sure to respond promptly to your lender's requests for information while your loan is being processed.

Now is a great time purchase or to refinance. However, it's sometimes difficult to decide whether or not to refinance or purchase now because there are so many things to consider. Each person has different financial situations and particular financial goals that should be considered.

If you are considering purchasing, refinancing, or would simply like to sit down with a Certified Mortgage Planning Specialists for a mortgage review or pre-qualification consultation, give my office a call. We work with numerous local and national lenders and are located right here in Wisconsin. Having offices in Appleton, Oshkosh, Green Bay and Grafton, you can be assured the very best of service on a local level. We were here yesterday, we are here today, and we will be here tomorrow to assist you in your mortgage planning needs.

If you are not quite ready to personally meet me, that's ok! Simply visit my websites and get to know me!

http://www.WisconsinLoanTips.com and http://www.MortgageProsofWisconsin.com Here you will find great tips, mortgage calculators, information on FHA, VA, Rural, Refinance, Purchase loans, general mortgage information and much more!