Why Locking is Better than Floating?

Once you lock your interest rate you are guaranteed that rate as long as you close with in the lock period. However, if rates fall you can not take advantage of lower rates. So should you lock or float?

There is an easy way to determine if you should lock your mortgage interest rate. There are only three options that can happen when locking an interest rate. Rates can go up, rates can go down, or rates can stay.

If you lock your interest rate and rates increase or stay the same you win. The only situtation you would lose is if rates decrease during your lock period. However, if you float and rates increase you lose, if rates remain the same you took a risk for nothing.

Lock your rate as soon as you can, UNLESS you know mortgage rates are trending down. The odds are on your side.