Refinance > Frequently Asked Questions
On a Refinance should I lock my interest rate at
mortgage application or float the rate until closing?
depends on one's outlook for interest rates, whether you are satisfied with the
current rate being offered (and would not be deterred from proceeding if rates
declined), when you need to close and whether or not a rate increase could
effect your ability to qualify for the mortgage. With a
purchase, there is a contractual
obligation to close on a specified date. With a refinance transaction, there is
no such obligation to close and therefore a refinance applicant could postpone
closing for a more favorable rate. Some lenders take the guesswork out of the
process by allowing borrowers to lock and then float the rate down one time
during the mortgage process. Typically a borrower is required to bring in a fee
of ½-1% of the mortgage amount which is then credited (or refunded) to
them at closing. It is a lock fee the lender requires to insure the transaction
will in fact close.
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REFINANCING MORTGAGE CALCULATOR
: Should I refinance? Does Refinancing your Mortgage make sense. Use this Mortgage Refinancing Calculator.