As mortgage rates inch higher and low housing inventory pushes home prices to new highs, prospective buyers are more eager than ever to find their forever homes, but according to expert economists, there’s no need to panic. Mortgage interest rates have risen from 3.05% in late to December to 3.56% one month later, but economists like Nadia Evangelou predict that the 30-year fixed mortgage rate will average around 3.9% at the end of 2022, remaining near historic lows.
Even a half-point in interest can translate to a significant chunk of money, so loan officers like Jon Meyer recommend paying to “lock in” rates for 15, 30, or even 45 days during the house hunting process, Realtor.com reports.
Homebuyers pay for a rate lock and spend more money the longer their lock’s in place. So you pay only for what you know you’ll need.
“If a lender quotes you 3.5% and it’s a 30- or 45-day lock period—but you plan to close in 10 to 15 days—perhaps you could select a 15-day lock for something even lower, like 3.375%,” Meyer explains.
If you’ve barely begun your house hunt, however, paying for a longer rate lock may be worth every penny for your peace of mind. The last thing you want is to be racing around trying to find a house right before your rate lock is up!
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