We Took the Plunge

Over the past two months we have been very interested in what the market was doing, specifically mortgage rates.  When we signed the contract to purchase our house back in January, the interest rate quote we received was 5.0%.  However, the earliest we could lock in our interest rate was 60 days before closing (keeping in mind that if our closing was delayed past the 60 days, we would have to pay a fee to extend our lock-in rate).  

We were sitting ducks.  We could obsess about interest rates as much as we wanted, but the reality of it all was that there was nothing we could do until we were within 60 days of closing.  We sat around and watched the market.  Luckily we liked what we saw -- falling interest rates!  

On day 60, we emailed our loan officer only to get quotes for 60, 45, 30 and 15 day lock-in rates with the 60 day rate being the highest and the 15 day rate being the lowest.  With this knowledge and the fact that the market did not show signs of improving, we cooled our jets and decided to wait until the 30 day mark.

Thirty days before closing, we again request a rate.  But, since the 15 day one was still lower, we again decided to take our chances and continue to float the market.    About a week later, we got another rate quote.  This time the 30 day and the 15 day rates were 4.5%.  Then around day 18 the 15 day rate went to 4.375%.  Also right around this time we were beginning to get cold feet in regards to our loan officer.  I called a few friends and learned that the loan officer should be able to get us 4.375% through September.  So, we asked for 4.375% and the loan officer said no.

So, every day we email our loan officer asking for a quote. -- he loves us -- and for the last week the 30 and 15 day rates have stayed at 4.5%. 

Today marks 15 days before closing.  This is a significant milestone because our loan officer's canned emails stated that we must lock in our rate 15 days before closing or we will be automatically locked in to avoid delays in closing.  Although, one of the many documents we signed stated we had to lock in our rate 10 days before closing.

Since we want to close by September 30th to qualify for the home buyer's tax credit, we decided to take the safer route and lock in our rate at 4.5%.  While, it is a great rate, we were slightly bummed that it was not the 4.375% we had dreamed of.  

About 30 minutes after emailing our loan officer, he sends me an email stating that we can get 1% discount points paid for by the seller as part of their agreement to pay closing costs up to 4% which would give us a rate of 4.375%.  In plain English: at no additional cost to us, we can get the rate we have been requesting all along.