Question:

j791 asks:

I am building a 210K home with 20% down and have a pre-approval letter from the bank. It will take 5 months to build the house and with rates this low, 4.8 for a 30yr fix, I think locking in a rate now might be the best bet. One lender only offers a 2 month lock for no additional charge and the other lender offers a 4 month lock for $630 and a 5 month lock for $820.

My question is can I go with the five month lock at 4.8 and then two months before I’m ready to close on the house go with a different lender who is offering lower rates? If so, what kind of fees would I owe the first lender for locking my rate and processing the loan?

Answer:

smithsussane answers:

I don’t think the lender will agree to give you a rate lock period for 5 months first and then again two months before you are ready to close on the property. In my opinion, 2 months rate lock with no additional charges is a good option. You should try going for it.


michael_ueltschey answers:

There is a product specifically for new construction that allows a 6 month lock with a float down option within 60 days if rates get better. It is called Builder rate cap. You can post here if you want more info.

Source: MortgageFit.com

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