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With Rising Rates, Mortgage Locks in San Clemente are the Way to Go

The past several months have seen mortgage interest rates rising by about a point from the previous lows in 2012. Although rates are still at historic levels, San Clemente home sales have slowed down; one of the big reasons is because buyers are turned off by having to pay more for their mortgage than they would have a year ago. The main thing buyers need to understand is that, unless the economy and national housing market goes in the tank again, rates will only continue to rise. Buyers on the fence about purchasing homes, condos and townhomes in San Clemente should not wait – take advantage of these low rates before they go up even further.

 

When to Consider Mortgage Rate Locks as a San Clemente Buyer

When you submit your home loan application and receive a pre-approval, you are quoted an interest rate based on your credit score, down payment amount, potential purchase price, and other factors. A big thing to keep in mind is that the rate quoted is only good for a short period of time, typically around 30 days unless you already have an executed purchase agreement for your new San Clemente home, condo or townhome. If you are just starting your San Clemente home search and like the rate quoted to you by your lender, you should inquire about a loan rate lock; keep in mind that most lenders charge for a rate lock, and this charge is based on the length of the lock (anywhere from 30 days up to 6 months with certain lenders). Check with the lender to see if the rate lock charge is refundable if you successfully close escrow within the lock period – some will do this, others will not. You also want to have a clear idea of how long your lender will take to approve your loan application once you’ve opened escrow; if the process may take awhile due to a large application back-log with your lender, you should definitely try to negotiate a rate lock so you aren’t hit with a higher interest rate if the approval takes longer than expected.

 

Mortgage interest rates are on the rise, but the current rates are still incredible (ask your parents what their rates were 15 years ago if you don’t believe us). For greater piece of mind, lock in your interest rate – you can bet that rates will continue to increase, so get a lower one while you still can.

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