Mortgage rates fluctuate daily, sometimes even hourly. A mortgage rate lock, or rate protection, locks in your mortgage rate, keeping it from rising from when you apply for your mortgage to when you close on your loan. But when you’re buying your home, exactly when are interest rates locked in?

Timing is imperative when choosing to lock your mortgage rate because if you lock it and the rates decrease, you still pay the original rate. 

Here at Altitude Home Loans, our team of trustworthy mortgage brokers in Tucson, Arizona, is here to guide you through the process of purchasing a home every step of the way. We make the process easy, from beginning to end.

Why Do Mortage Rates Change?

Mortgage interest rates are directly affected by the current market. If the economy is thriving, interest rates usually increase. However, if the economy is in a slump, rates usually decrease in hopes that low rates will encourage economic growth.

The Federal Reserve keeps inflation under control by handling the federal funds rate. The federal funds rate is the rate that financial institutions can borrow money. The changes in the federal funds rate cause interest rates to rise or fall.

Interest rates tend to increase when there is a high demand for purchasing homes. If the homebuying demand is lower, interest rates usually decrease to attract potential homebuyers.

When Are Interest Rates Locked In?

Your mortgage interest rate locks in after your home loan lender approves your loan application and you accept the purchase contract. Once you have an approved purchase contract with an established closing date, you are committed to the interest rate outlined in the contract. Keep in mind the period of time when the interest rates are low enough for you to afford your mortgage payments, including the closing costs, in your budget.

A rate lock period ranges from 15 to 60 days. Some factors that may affect the ability to lock your mortgage rate or change the rate that was originally offered are:

• Changes in your financial situation
• Changes in your credit score
  • Opening a new line of credit while acquiring a mortgage has the possibility of changing your debt-to-income ratio, thus impacting your credit score
• Changes regarding your application

Learn More About the Mortgage Process

There is a great deal involved in purchasing a new home. In addition to searching for the perfect home, applying for and acquiring a loan from mortgage lenders, and locking in a mortgage rate, new homeowners should also learn more about the difference between MIP and PMI.

Our team at Altitude Home Loans is here for you every step of the way. We can help answer the question, “when are interest rates locked in?” We offer conventional, fixed-rate, and floating mortgages and have mortgage programs for first-time home buyers. We also have a downpayment assistance program!

Call us today and review your options with our team of experts at Altitude Home Loans, the 2021 Reader’s Choice Award Winner in the Arizona Daily Star, at 520-500-1010!

Thinking about purchasing a home this year? Consider Tucson, Arizona!

Tucson is among the top 10 U.S. cities identified as a hidden gem in the housing market. This is largely based on the number of homes for sale in the Tucson area, the cost of the homes, and the lower mortgage interest rates trend for a home loan in Tucson by Altitude Home Loans, among other things. Despite the ongoing COVID impact making many of us question what lies ahead, this may be the year to consider purchasing in Tucson. 

What’s Driving Home Sales?

Home sales over the past two years have been impacted by building material shortages, which have resulted in fewer new homes for sale and increased costs for those that were available. With increased costs in supplies came longer development times, which further impacted sale prices. With that trend expected to continue in 2022, experts predict only a 1% increase in overall new home sales across the country.   

Why Tucson? Why Now?

We are in unprecedented and somewhat uncharted territory with the ongoing COVID crisis impacting how we work and live; however, we are a very adaptable society. After all, our lives must go on. Family matters, and we want to maintain our quality of life. To do that, we need to find ways to keep working and moving forward. Fortunately, we suddenly find ourselves with an even greater ability to do just that.   

Gone are the days when it was necessary to consider buying a home close to work. With much of the job market migrating to a largely teleworking format, we can now work from anywhere and live anywhere. We can now consider purchasing in cities and states that appeal to our lifestyle, our weather preferences, and more than ever, our wallet size. Instead of settling for a smaller, more expensive home near the brick-and-mortar office, we can buy a larger, less expensive home in the area of our choosing.

What Does This Mean Overall?  

The incredible flexibility of moving wherever we want opens up a world of possibilities, the biggest of which might be moving someplace that we love. Whereas before the pandemic many buyers felt limited by what a mortgage calculator showed them they could afford in their area, now they can get much more for their money if they move somewhere else.

There’s a lot to consider when it comes to getting a mortgage, including the life of the loan, closing costs, percentage points, and how mortgage interest rates trend. The process of buying a home may never be completely easy, but being able to decide where and for how much certainly makes it a lot better. 

If you’re thinking about purchasing a home this year, there is greater incentive to purchase in Tucson than ever before. Beyond the draw of the incredible sunshine, the beautiful mountains, and the wide open spaces, there’s the affordability.

Look at the changing trends and discover the mortgage loan truths for yourself. If you can take your life anywhere, consider taking it to Tucson.      
For more information on getting a mortgage in Tucson, contact us at 520-500-1010 today.

If you’re looking for a loan of any sort, one of the most important things you need to consider is whether it has a fixed or variable rate. As you know, loans work by way of a financial institution giving you a specific amount of money that is to be paid back according to the details of the loan contract you signed. Financial institutions make their money from loans by charging interest on the money you borrow; this is what is known as your loan rate.

Depending on your intended purpose for taking the loan out and how you plan to pay it back, fixed-rate and variable-rate loans offer different advantages. To make the best decision about which loan type is right for you, you need to know the core differences between each of these loan types so that you can see which one matches your financial objectives the best.

Continue reading to find out all of the critical information you need to know as it relates to fixed-rate and variable rate loans.