The answer to this question is complicated and depends heavily on your specific situation. Whether or not to lock or float a mortgage rate is a crucial decision for both the borrower and the lender. This one decision will determine what interest rate a homeowner will pay each month for the next 30 years. If you decide to lock your mortgage rate, you are guaranteeing a certain interest rate on your mortgage that will not change, even if mortgage rates spike after your rate has been locked in. However, borrowers often decide to float their mortgage rates even though it can sometimes become a gamble. If you choose to float your rate, your mortgage rate is subject to change until it is locked.
Floating mortgage rate packages have interests that fluctuate on a daily basis. Here are some instances when the floating rates change:
Mortgage rates change very frequently. Thus, if one decides to purchase a home, they should consider the current mortgage rates before making a final decision on whether or not they want to float or lock their mortgage rate.
Regardless of which path you choose, make sure you are aware of the benefits and consequences of both floating and locking your mortgage rate. If you have questions about your options, contact the pros at Midland Mortgage and find out the best solution for you today!