For many Long Islanders in the process of purchasing a home, locking in a mortgage rate is a crucial decision that can have long-lasting financial implications. However, with mortgage rates constantly fluctuating, some buyers may find themselves in a situation where they have locked in a rate at a higher level than the current market rate. This can lead to feelings of regret and frustration, especially when news breaks that the average 30-year fixed rate has dropped to 6.47%, the lowest it has been since May 2023.
Local mortgage professionals have advised borrowers that they do have options available to them before they reach the closing stage of their purchase. One of the first steps recommended is to speak with their loan officer to discuss what can be done in light of the rate drop. Brian Levine, a loan officer at Contour Mortgage in Garden City, mentioned that while it is rare to see mortgage rates decrease significantly during the 45 to 60 days it takes to complete a purchase, it is not impossible.
Levine also highlighted the option of a „lock break fee“ that many banks and mortgage institutions offer if borrowers choose to relock at a lower interest rate. Typically, there is a minimum amount the rate must drop by, usually between a quarter and a half of a percentage point, in order to be eligible for this option. Jeffrey Segal, founder and president of Lighthouse Mortgage Corp. in Hauppauge, advised borrowers that if the rate drop is significant enough to impact their loan, they may want to consider moving their loan to a different lender.
However, switching lenders may come with its own set of challenges. Segal mentioned that it can take a lender four or five days to issue a new approval for the borrower, and in some cases, a new appraisal may be required by the new lender, leading to additional out-of-pocket expenses. John Bernardes, vice president of mortgage lending at Rate in Farmingdale, emphasized the importance of exploring all options if the change in rate could potentially save borrowers a significant amount of money.
In conclusion, while navigating the mortgage process can be complex and at times overwhelming, it is essential for borrowers to stay informed and proactive in order to make the best financial decisions for their situation. By working closely with their loan officer and considering all available options, Long Islanders can potentially take advantage of lower rates and save money in the long run.