On a refinance transaction, if the savings you will achieve with the new lower rate will recapture the closing costs of the loan in a relatively short period of time, you should probably go ahead and lock your rate and close your loan. Trying to time the bottom of an interest rate cycle is tricky and each month you delay costs you in the form of carrying a higher interest rate on your old loan. If rates fall further, you can always refinance again.

On purchase transactions, in times of stable interest rates, most of our customers lock when they are within 30 days of closing. Locking for a period longer than 30 days increases the cost of the loan slightly but is sometimes a good idea if rates are volatile. If your closing is more than 30 days out, we recommend you compare rates and points with your loan advisor for 30, 45 and 60 day locks and make your decision accordingly.

NOTE: Rates are currently at historic lows. If you are applying for a refinance transaction or a purchase in escrow, we recommend you lock your rate as soon at time of application. If rates drop further while your loan is in process, you can take advantage of our float down policy. However, if rates suddenly shoot up (which they can do very quickly on unexpected economic news), you will wish you had locked your rate when you applied.