What is a Rate Lock?

You've decided on purchasing a home at the Lake of the Ozarks. You know that mortgage rates are changing daily, so how do you make sure the rate originally available to you doesn't go up? Today's blog discusses rate locks and some common questions in regard to locking in a mortgage rate.

Rate Lock 

A rate lock is a guarantee from your Lake of the Ozarks mortgage lender that they will give you, the borrower, a certain interest rate, at a certain price, for a specific time period. It protects the borrower from rate fluctuations for the duration of the lock period. If market rates rise after the rate is locked, the borrower will still get the lower rate. The downside, however, is that if rates drop after the rate is locked, the borrower might not be able to take advantage of that opportunity.

How a Rate Lock Works

Once your loan application has been approved, your mortgage lender may offer you a rate lock. Sometimes there is a fee for this, and the fee varies widely according to the amount and term of the loan, as well as the rate lock period. Rate locks are typically available for 30,45 or 60 days, and sometimes longer. Typically a rate must be locked at least a few days, but usually a week, before closing. This allows the lender time to prepare the closing package. If the rate lock expires before closing, you may be able to get an extension. If an extension is not granted, you'll end up paying the market rate, which could be higher.

Reasons Your Interest Rate Could Still Change

Even if your rate is locked, it could still change if there are any changes made to your application. Here are some common reasons a borrower with a rate lock could still see a change in interest rate:

• A change in the type of loan 
• A change in the loan amount
• A change in the downpayment amount 
• A change in the home appraisal
• A change in your credit score 
• A change in your verified income  

Questions to Ask Your Lender

Rate lock policies vary from lender to lender. Avoid any surprises with your interest rate by asking your mortgage lender at the Lake of the Ozarks the following questions:

• What does it mean if I lock my rate today? 
• What rate lock time frames are available to me?
• What are the fees associated with my rate lock? 
• What happens if my closing is delayed and the rate lock expires?  

To learn more about what mortgage rates are available to you and how to lock them in for your Lake of the Ozarks home purchase, call Lakelender Michael Lasson at 573-746-7211. I'm here to work with you every step of the way. I'll discuss your Lake of the Ozarks home financing needs, offer competitive interest rates and back it up with the first-class service you deserve!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

Understanding Why Mortgage Rates Fluctuate

When applying for a mortgage loan at the Lake of the Ozarks, one of the first things you want to know is what rates are available to you. Mortgage rates are constantly changing, but why? In today's blog, your Lake of the Ozarks mortgage lender addresses how mortgage rates are determined and what makes them move up or down.

How Mortgage Rates are Determined

While there are a variety of different factors that affect mortgage rates, the movement of the 10-year treasury note yield is said to be the best indicator of whether mortgage rates will rise or fall. Mortgages are typically packaged as 30-year products; however, most mortgages are paid off or refinanced within 10 years. The 10-year treasury note yield is the rate of return that you receive when you invest in this 10-year note. Essentially, you're loaning money to the U.S. government and they're paying you to do so. The yield is important, because as mentioned above, it is the benchmark that guides other interest rates, with the exception of adjustable rate mortgage which follow the federal funds rate. However, even the Federal Reserve watches the 10-year treasury note yield before making its decision to change the federal funds rate. Due to the fact that the 10-year treasury note is sold at an auction, it indicates the confidence that investors have in economic growth.

The Cause of Rates Rising or Falling

Mortgage rates fluctuate over time as a result of the interaction of the supply and demand for money in the economy.When the economy is growing, the demand for money increases and therefore, interest rates move upward. When economic growth slows or stops, interest rates move back down. One key factor is inflation. Inflation increases prices and deteriorates spending power in the economy, which in turn slows growth. For future homeowners, this means increased interest rates, making home buying more expensive. Economic activity is measured across the nation and reported to the Federal Reserve Board. They then take that information to determine whether they want to try to increase interest rates to control growth or decrease rates to spark growth and encourage borrowing. While the federal reserve doesn't directly set the interest rates, they can indirectly influence them by increasing or decreasing the money supply. In addition to regular monitoring by the feds, the financial markets establish benchmarks to understand where interest rates might be headed.

With that being said, the federally determined rates aren't necessarily available to everyone. Each borrower's situation is different, and other factors, such as your credit, also come into play. To find out what mortgage interest rates you could qualify for, contact the best mortgage lender at the Lake of the Ozarks at 573-746-7211. I'm here to work with you every step of the way!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

5 Home Refinance Triggers

While most people think about refinancing a home at the Lake of the Ozarks to get a better interest rate, lower their monthly payment or shorten the term of the loan, there are other factors that can trigger the idea of refinancing. Keep reading to learn more about some of these refinance triggers. If you're in any of these situations, talk to your Lake of the Ozarks mortgage lender about your options.

1. Experiencing a Divorce

In the event you and your spouse decide to divorce, and both names are on the mortgage, you'll either need to sell the home or refinance it. In certain situations, where you need to remove a name from the mortgage or title, a home refinance can be an appropriate vehicle to do so. Talk to your lender about the best options for you and your situation.

2. Recovering From a Low Credit Score

Even if interest rates haven't dropped since you first applied for your mortgage, you may still be able to get a better interest rate if your credit score has improved. If your original mortgage rate was based on a low credit score and you've been working to improve that score, you might talk to a mortgage professional at the Lake of the Ozarks about what rates you might qualify for in a refinance. 

3. The Ability to Discontinue Mortgage Insurance

With a low enough LTV (Loan-to-Value), you can refinance your loan to remove the private mortgage insurance that was required at the time you originally obtained the loan. If your home either increased in value or you've paid your loan down enough, a refinance might save you money via a lower interest rate and the absence of the insurance payment. 

4. The Need to Cash Out Some Equity

If you're in need of some cash flow, whether it's for renovations or to pay off other debt, you might consider refinancing your home. Renovating wisely can actually increase the value of your property, which is particularly important if you are considering selling your home in the near future. If you're wanting to consolidate debt, you likely won't find a personal loan with interest rates as low as your home loan rates. Talk to your lender to see if a cash-out refinance is an option for you. 

5. The Desire for Long-Term Savings

If you're planning to stay in your home for a long time, then a home refinance might be a great option for you. With a lower interest rate, you could save more money in the long run. However, if you're planning to sell and move soon, the upfront costs to refinance your mortgage might not be worth the investment. You won't have the home long enough to benefit from the interest savings.

If you're considering Lake of the Ozarks home refinancing, give us a call at 573-746-7211 to discuss your situation. As your mortgage lender at the Lake of the Ozarks, I'm committed to working with you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

3 Considerations for an Adjustable Rate Mortgage

When choosing to finance a home at the Lake of the Ozarks, you have options. One decision you'll need to make is whether you want a fixed rate mortgage or an adjustable rate mortgage. With a fixed rate mortgage, your interest rate stays the same throughout the life of the loan. However, with an adjustable rate mortgage, you may be able to secure an even lower rate in the beginning; after that introductory period, the interest rate then moves with the market. Keep reading to learn more about adjustable rate mortgages and what you should consider about them from your Lake of the Ozarks mortgage lender.

1. Consider the Current Spread. 

The "spread" is the difference between the adjustable rate and the fixed rate. This difference is your incentive for choosing an adjustable rate mortgage over a fixed one. The bigger the spread, the more attractive an adjustable rate mortgage will look. The "teaser period" is the duration that the loan will stay at that introductory rate before it shifts to the market rate, which could be higher or lower than what you were previously paying. That's the risk you take when choosing an adjustable rate mortgage. In general, the shorter your teaser period, the better introductory rate you can get. The savings available with an adjustable rate mortgage can be substantial during the teaser period. However, after the mortgage enters the adjustment period, the savings can be reduced or even eliminated.

2. Consider Your Time Frame. 

Another important consideration when choosing between an adjustable rate mortgage or a fixed mortgage is how long you plan to stay in the home. If you feel you'll stay in your home for the rest of your life (past the teaser period), then you might be better off sticking with a fixed rate mortgage. However, if you think you'll only stay in this house for a few years before selling or refinancing, then an adjustable rate mortgage may be the better option. According the the National Association of REALTORS, homeowners typically own property for close to 7 years before selling. Older homeowners typically keep a home longer, while first-time home buyers will often keep a home for a shorter period of time. There's no sense in paying the interest rate for a 30-year mortgage if you're only planning to stay in the home for 5 years or less. See what kind of savings you could get with an adjustable rate mortgage if this is the case.

3. Consider the Loan Size. 

Are you purchasing a home that requires a "Jumbo Loan"? A jumbo loan is a mortgage loan which exceeds the loan size limits for an area. When borrowing more than your area's loan limit allows, the fixed rate pricing tends to deteriorate and your best choice could be an adjustable rate mortgage. The savings you can get with an adjustable rate mortgage on a jumbo loan can be huge. It's not uncommon to see the adjustable rate on a jumbo mortgage beat the fixed rate by 250 basis points or more. That's a pretty big incentive to choose an adjustable
rate over a fixed rate mortgage.

With mortgage rates remaining low, the savings of an adjustable rate loan are even better. If you're considering a home loan at the Lake of the Ozarks, give us a call at 573-746-7211 to discuss your options. As your mortgage lender at the Lake of the Ozarks, I'm here to work with you every step of the way. When it comes to your financing needs, I'll discuss your options, offer competitive interest rates and back it up with the first class service you deserve.

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.