With interest rates fluctuating from day to day the interest rate you were quoted when you applied for your home loan may not be the same one you receive at closing.

A way to combat the uncertainty is to lock-in to the interest rate when you apply for your home loan.

By locking in you will keep the interest rate you were quoted when you close your loan. You can usually lock in for 30 to 60 days.

Sometimes there is a fee for locking in to an interest rate. You may want to ask your lender their opinion on what the market will be doing in the next couple of months. While no one knows for sure, they may be able to give you an insight. But the decision is yours and you need to decide how important that interest rate is.

If the interest rate goes up not only will you have higher monthly payments and be paying more interest over the life of your loan, but you may not qualify for the loan anymore. You really need to do some figuring to see what could happen to you and your loan if the interest rate goes up.

If the fee for locking in is high, and you don't feel the rate will go up, you can let the rate float until closing.

Obviously if you feel the rate will go down you may want to let it float or consider holding off until the rate goes down as low as you think it will go.

Either way you go it is best to be informed of your choices and the consequences of your decisions. Ask your lender questions so you can make the best home loan decisions.

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