Should You Lock In Your Mortgage Rate?


Mortgage rates have changed again this week. The market seems to swing according to the media focus. With the start of the Olympics, we may be in for a bit of a reprieve. However, according to a CNN article by Les Christie, borrowers may benefit by locking in their interest rate (pre closing). Several experts cited in the article expect interest rates to go up in the next six weeks and forecast at least 7% interest rates by the end of the year.

“For every half point interest rate increase, the monthly payment on a typical mortgage of $200,000 jumps nearly $70. That adds up to ore than $800 a year, and $8,000 in the first 10 years of a 30-year mortgage” For Palos Verdes real estate, the numbers are much higher but one can use this information as a base to compute what it will mean to their new mortgage. Locking in an interest rate today (if you are in contract or have a binder on a home) is good for 60 days and may cost as much as an extra 1/8 of a point. It’s worth a call to your lender to inquire.

Above mortgage rates are provided by Jim Kurata, Peninsula Mortgage/Chase.

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