I'm looking to buy soon, should I lock my rate now? Ask an Expert series

One of our clients posed this question in an email the other day:

"I'm looking to buy soon, should I lock my rate now?"

Signed Wondering What to Do Next.

We asked Sue Florence, Senior Loan Consultant of Guarantee Mortgage.
Sue is FHA certified and has been in the mortgage brokering business for many years funding millions of dollars worth of San Francisco property.

Dear Wondering What to Do Next,
You may find some, but not all lenders will allow you to lock a rate while you are house hunting. You should also realize it will cost you up front money to lock in a rate for a specified amount and term. This by the way includes an interest rate higher than what would be quoted today. Since the lock is for a fixed term say 30 to 60 days, you could find yourself in a situation where the rate lock expires just before you close escrow on your new home and find yourself paying an additional fee to extend the interest rate lock until closing.
In the end, unless your crystal ball says the interest rates are going to spike significantly, you might be better served waiting, looking for your home and then once in contract, locking and even seeing if you'd rather spend that money on points to reduce the interest rate further, and that will lead us to our next "Ask an Expert" article.

Signed, Sue Florence, Senior Loan Consultant, Guarantee Mortgage: 415-345-4341 sflorence@gmwest.com

In the meantime, feel free to ask for a free home price index for the neighborhoods. We'd be happy to send you the median sold home prices on homes you might be interested in. This will quickly tell you what neighborhoods are more affordable for the style of living you want. Or click on to our San Francisco Real Estate Market Trends Newsletter to see neighborhood by neighborhood graphic trending prices from now to two years ago!