Should we pay $1500 for a 170 day mortgage rate lock?
We are currently buying a new home. The current rate we’re quoted by the builder’s preferred lender is 5.25% for a 30 year fixed. The home will probably be completed in July 2011, about 5 months from now, which is when our mortgage would be funded.
The loan officer told us that we could lock in that 5.25% rate for 170 days for a fee of $ 1500. My guess is that rates will go up by July, but I don’t know if it would be better to pay the fee to lock in the rate now, or to pay a slightly higher interest rate later.
Do you have any advice? We’re new at this. Thanks!!