What is the earliest someone can lock in a rate on a house that is being built, due to finish in 7-9 months? I have a home that is not built that will be built soon, I'm told by some companies I can pay a point up front to lock in a rate now for 1 year and some companies telling me not until 60 days before the house is built.

C.

Lakewood
Washington

Answer:

Actually, both answers are correct, depending on the loan programs available to the mortgage company you ask. Usually for construction loans there is a lock period anywhere from six months to one year, with a float down option (if rates are lower) before closing. If a loan officer told you the longest lock available was 60 days, then I would guess that either he/she didn't know what they were talking about or doesn't do construction loans.

It is typical for a mortgage company to want a one point lock-in fee for a construction loan. These loans are very tedious and time consuming for the loan officer and they want some guarantee that you won't switch to another mortgage company just before closing. Hence the one point "lock-in" fee. For example, I refund the fee at closing as long as you close with me. If not, I keep the fee for my time and effort.

Please feel free to contact me if you have more questions. Good luck with your construction!

Rick Lanicek
PrimeLending, A PlainsCapital Company
17950 Preston Rd Ste 50
Dallas, TX 75252-5759
(972) 705-9721
(800) 256-0817 Ext 202
Mobile (214) 552-6125
eFax (972) 692-7260