Rate Lock Duration

 

Lock durations can vary for mortgage financing, but most lenders lock in the interest rate for 45-60 days from the date the loan application is submitted. As long as the loan is closed within that lock-in period, the lender honors the agreed upon interest rate.

Some consumers are misled by advertising that quotes unrealistically low rates based on 15- or 30-day lock durations. This is called 'short-pricing.' The lender basically knows the borrower doesn't have time to meet their conditions and have all the necessary paperwork in order within that brief time period. As a result, the lender is not obligated to honor the low rate that was listed in their advertising.

For simple refinance transactions, a 30-day lock-in period is more realistic. For purchase transactions, which are typically much more complex, borrowers are much safer going with a 45- to 60-day lock, even though the interest rate might be a little higher than the rate they see quoted on billboards and the Internet.

Borrowers should make sure they have a written rate lock agreement, and allow themselves a reasonable amount of time to close their loan. I prefer to lock in all my clients as soon as their application is filed, rather than gamble with predicting short-term interest rate movement. My team and I focus more on assisting clients with long-term goals and management of their mortgage debt to secure a strong financial future.

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Rates as of market open on September 3rd, 2013
	RATE	APR
30 Year	4.625%	4.750%
APR based on a 30-year loan of $250,000 with a 1% origination fee and a fixed rate of 4.625% with no private mortgage insurance. Repayment term would be 360 monthly payments of $1,285.35 each.
15 Year	3.625%	3.837%
APR based on a 15-year loan of $250,000 with a 1% origination fee and a fixed rate of 3.625% with no private mortgage insurance. Repayment term would be 180 monthly payments of $1,802.59 each.
FHA 30 Year	4.25%	5.788%
APR based on a 30-year loan of $250,000 with a 1% origination fee and a fixed rate of 4.25% with FHA/HUD mortgage insurance required for the life of the loan. Repayment term would be 360 monthly payments of $1,530.42 each (includes FHA mortgage insurance monthly premium).
Jumbo 30 Year	4.625%	4.725%
APR based on a 30-year loan of $700,000 with a 1% origination fee and a fixed rate of 4.625% with no private mortgage insurance. Repayment term would be 360 monthly payments of $3,598.98 each.
Monthly payment amounts include principal and interest only. Additional costs such as property taxes, hazard insurance and mortgage insurance may increase your payment amount and APR. Rates are subject to change without notice and depend in part on your unique credit history and transaction characteristics. See a mortgage loan lender for additional information. Loan pricing may only be locked through an Idaho First Bank Mortgage loan lender to be effective. The material contained in this message is for informational purposes only and is not intended as professional advice. Idaho First Bank assumes no legal liability or responsibility for the accuracy, completeness or usefulness of the material. The material contained herein does not necessarily state or reflect the opinions of Idaho First Bank.