If you’re considering buying a home, you’re probably also considering whether or not to lock in your best mortgage rate Canada. While there’s no right or wrong answer, there are compelling reasons to do so before rates increase. Read on to learn more.
Ten Reasons to Lock Your Mortgage Rate Before It Increases
Here are ten reasons to lock in your mortgage rate before it starts to increase:
1. Peace of Mind:
Once you lock in your rate, you’ll have the peace of mind of knowing that your monthly payments won’t go up, even if rates do. This can make budgeting for your new home much more straightforward.
2. Protection from market fluctuations:
Locking in your rate protects you from potential market fluctuations that could cause rates to go up before you close on your home.
3. Avoids being penalized for improvements:
Some lenders will penalize borrowers for improving their credit score or employment status after they’ve already been approved for a loan. By locking in your rate, you can avoid this issue altogether.
4. Interest accrues immediately:
When you lock in your mortgage rate, the interest starts accruing immediately. So you’ll start building equity in your home from day one.
5. Know precisely how much house you can afford:
With a locked-in mortgage rate, you’ll know exactly how much house you can afford based on your monthly payment amount. This can help narrow your search and make the home-buying process less overwhelming.
6. Enjoy locked-in rates during the entire process:
Not only will locking in your rate protect you at closing, but it will also keep your monthly payments the same during the entire life of the loan – even if rates go up later on down the road.
7. Gets rid of surprises later:
One of the worst things about buying a home is finding out that something unexpected has come up, and now you can’t afford the home you thought you could. However, when you lock in your mortgage rate upfront, there are no such surprises later on down the road.
8. Provides more negotiating power with sellers:
In a sellers’ market, having a locked-in mortgage rate gives you more negotiating power when making an offer on a home since the seller knows that financing isn’t an issue.
9. Take advantage of today’s low rates:
Mortgage rates are still near historic lows, so now is a great time to lock in a low rate while you still can.
10. Gives first-time buyers peace of mind:
First-time home buyers often worry about things like whether or not they’re getting a good deal or if they’re doing everything right. Locking in their mortgage rate helps give them peace of mind knowing that at least one Element of their purchase is finalized and taken care of early on in the process.»
Conclusion:
As you can see, there are many compelling reasons to lock in your mortgage rate before shopping for a home or refinancing your current property. Doing so can provide peace of mind, protection from market fluctuations, and numerous other benefits throughout the process – from application to closing.