I was a residential loan officer during and after the Carter years, and I recall interest rate increases of over 1% in a day!  Natalie and I have two buyer clients in escrow; both loans are approved.  The last several days saw an (approximately) ½ drop in interest rates. Naturally, we hope our clients qualify for the lower rate and there was a lot of scrambling on our end in order to decrease their “approved locked-in interest rates”.

Home buyers shopping for a 30 year fixed interest rate should ask the following questions:

What is the interest rate? Is it fixed for 30 years? – (Ask for the interest rate on a 0 points loan… Compare all lenders on a 0 point loan).

What additional fees are there? And how much are they?

Is there a (prepayment) penalty if I pay the loan off early?

When do you lock in (guarantee) the interest rate?

How long is the lock in? And is that time period sufficient to close my loan? (A 21 day rate lock will not be of any value in a 45 day escrow OR if the lender can’t close your loan in 21 days).

What happens if interest rates decrease after I lock in my interest rate? Am I eligible for the lower interest rate?

Happy loan shopping!