Does Locking a loan make sense?

Normally, I would say yes in almost every situation - except now. Why? There are a couple of reasons. First, lenders are backed up with huge volumes of re-fi's right now. To complete a refinance takes anywhere from 30 to 60 days.

Second, as you look at the premiums to lock - it gets very expensive to lock a loan for 45 or 60 days.

Third, with the government saying it is committed to keeping rates low for some time to come, it might be safe to assume the recent run up in rates is only temporary. This assumption is the key. If the government truely is committed to getting housing back on its feet, then we can expect rates to come back down.

So with all this, why would you pay a big premium to lock a loan, only to find out rates are coming back down?

Of course if you are looking to refi right now, and are in no rush, my advice is to sit tight, get the paperwork ready, and wait a week or two.

If you'd like to discuss it further, you can find my contact info at www.neighborlyfinancial.com.