Locking in a VA Loan Long Term
Hey, do you like today’s VA mortgage rates? Do they look pretty good to you and you want to take advantage of them? Home values have recovered in most areas and interest rates are still near historic lows should you make the jump and lock in a VA rate? What if you don’t yet have a property, can you still lock in a rate then go find a home?
Over the years, there have been a few versions of a “lock and shop” mortgage loan yet the lenders who offered such programs are no longer in business. The idea was to apply for a mortgage for a preapproval, lock in your rate for a specified time frame then find a property after the fact. Today however, you won’t find that option. VA lenders, along with others, want a property address identified before a rate can be locked.
Okay, so you do find a property, but the closing date is not exactly determined. For example, you buy a new home but it’s not going to be completed for another four months. Can you lock in today’s rates for four months if you have a property?
Most VA lenders do allow for longer term locks but don’t expect to get the absolute best rate. The longer you lock in an interest rate, the more points you’ll have to pay or have the rate increased to cover the longer term. For each 30 day period, you can expect to pay either another .50 point or increase your rate by one-eighth of one percent. For a four month lock, your VA lender might ask for 2 additional points upfront to lock today’s rate. Not all VA lenders offer such long term locks but for those who do, it won’t be free.