On this episode of the Loans Elevated Podcast, your host Broch takes you through extended rate locks and why you should pay attention to them.
An extended rate lock is when you can lock in your mortgage rate for a specified amount of time, like 6 months or a year for example, which guards you against rates which continue to climb.
Broch gives us an example of a 6 month rate lock, which costs you 1 point (1% of whatever your loan amount was). Last week, the market shifted after someone in the fed said something, causing the market to shift by 1.3 points in one day, meaning you come out ahead. In the past month, the market has worsened by 3 points, so it’s clear these locks can be useful.
In another example, Broch shares your options of what you can do if you lock your rate and the rates begin to improve. You have the ability to cancel the lock and float the market for 30 days, and on the 31st day, you have the option to lock again. This does leave you exposed, however it can be beneficial if it goes your way, especially considering there’s no attachment to the original lock and no fee.
A final option Broch gives us is float down. This means you keep your lock for the whole 6 months, but you have the ability to float down one time within 30 days of closing, meaning you get about 70% of the market gains.
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Hosted by:
📢 Broch Lassig, Branch Manager NMLS340314
📢 TJ Heidenreich, Sales Manager NMLS1802412
📢 Ryan King, Loan Officer NMLS1870771
Branch NMLS2048956
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call for details.
CrossCountry Mortgage, LLC. NMLS3029 (www.nmlsconsumeraccess.org)
🔹 Disclaimer: The information in this podcast is for educational purposes only and not a substitute for professional financial, legal, or tax advice. Always consult with a qualified professional before making financial decisions.
