12/20/2014

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Consumer

Mortgage rates on the rise, time to get aggressive

Mortgage rates on the rise, time to get aggressive
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Mortgage rates are still historically low, but they're headed up.
 
Which raises the question: should you lock in a rate if you're actively shopping for a home or about to refinance an old loan?
 
"Yes, it's the time to get a little aggressive."
 
Jean Chatzky is financial editor for the TODAY show.
 
"I would not only lock in, I would pay a couple of hundred dollars for a float-down option, so that if rates roller coaster a little bit on their way up, you've got some protection to get you those lower rates. But, the trend that we've noticed is on the way up and this is the time to lock in for the long term."
 
You may have noticed that a lot of loan companies are offering super-low rates on their adjustable rate mortgages right now.
 
Chatzky says the only time she would consider an ARM, is if she knew she wasn't planning to stay in the house for very long.
 
"I would try to match the duration of the ARM to the time that I'm spending in the house. So, get a 5-year ARM or a 7-year ARM. But, I don't believe this is the time to go for a 1-year ARM. I think you're going to get caught in the rising-rate environment."
 
More Info:

Zillow: When to Lock in a Mortgage Rate

 

Nolo: Mortgage Rate Locks: How They Work

 

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