26 Mar

What is a Rate Hold?

General

Posted by: Shelley Zielinski

Have you ever wondered, “what is a Rate Hold”?

Rates are going up, so let me take a few minutes to explain it to you, and what it means.

If you shopping for a home, or have worked with a mortgage professional in the past, you’ve most likely heard of rate holds before. If not, it is something that every potential homeowner should be aware of. This is especially true for the application process as it has some great benefits for active shoppers.

If you are not familiar with the term, a ‘rate hold’ refers to locking in a specific mortgage rate for a limited period of time. This is offered through most lenders, assuming you are a potential client looking to purchase a home and need a mortgage. They are not eligible for individuals that are refinancing their mortgage, or looking to transfer it to another lender.

If you qualify for a rate hold, there are a few things you should know – from restrictions to benefits! The first and most important is that rate holds are typically only offered for a period of 90-120 days. So, once you have created your mortgage application with a broker and submitted it at the interest rate that best suits you, that rate will be protected for 90-120 days while you shop.

A rate hold is not a commitment. It does not force you to work with that lender, or the mortgage broker who submitted it. It also does not affect your future chances of receiving approval down the road. Instead, it simply guarantees that rate for you, if you find a home you want to purchase and sign the mortgage agreement before the rate hold is up.

This can be truly beneficial in volatile markets or those with high competition. If you submit your application to a lender for a fixed rate of 2.49% on a five year term, but while you are searching for your perfect home that rate moves up to 2.99%, the rate hold will protect you and allow you to still sign at 2.49%. This can mean huge savings!

For instance, if you are looking for a standard $500,000 mortgage (25 years amortization, fixed-rate, 5-year term), your monthly payments would be $2,237.35 at 2.49% interest. This would jump up to $2,363.67 per month at 2.99 percent. This is a difference of $126.32 per month or $1,515.84 annually; which can really add up on a 25-year mortgage!

Another benefit is that, if the rates go down, it does not stop you from taking advantage of the lower offer. Instead, it protects you from rate increases after you’ve determined your budget and are in the process of purchasing a home.

It is also important to note that, once the rate hold expires after 90-120 days, there is nothing stopping you from submitting another rate hold. It will just be subject to the interest rates as they stand on the day of submission.

Reaching out to a mortgage professional can help you better understand the current rates and benefits of a rate hold. In addition, they can help you find the best option to suit your needs thanks to their connections with hundreds of lenders!

-DLC media team

Why wait? Contact me anytime and we can get a rate hold for you –Shelley

21 Mar

Hi, I am Shelley!

General

Posted by: Shelley Zielinski

Hello,

for those of you who don’t know me, my name is Shelley. I could talk about being a certified, licensed, award winning mortgage broker for over 25 years, but you can read all that fun stuff in my bio. Instead, I would love to use this blog for you to get to know me a bit more. I am a proud mama of two grown kids and grandma to the world’s cutest grandbabies (I might be a bit bias he he). I have a family of Bengal cats (a mom, dad, son and daughter) who drive me nuts but are also the best co-workers keeping me company in the office while I work. My husband and I’s favorite getaway is Sproat Lake where we enjoy boating, water sports, nature and most of all the beautiful sunshine.

Why do I share all this with you, you might ask!? Well, I want you to know, I am a real person just like you. I want my clients to know I see the humanity in each deal I do. I take the time to understand what people really need, then I create personalized plans because I genuinely care about what is best for my clients long-term. I am so proud to say that my success truly comes from the strong connections I build with people.

I am going to start blogging more, making an effort to post every Friday. I am hoping blogging will present an opportunity for me to not only connect with you more but also allows me to share valuable information that can help answer your mortgage related questions; and ultimately, SAVE you MONEY.

Shelley