Lock N' Shop Program Takes Guesswork out of Mortgage Rates

As we enter the peak of purchase season, mortgage rates are a hot topic. Many potential homebuyers are nervous to throw their towel into the ring and start house hunting because they’re concerned about what mortgage rates will be when they close.  It’s a legitimate concern, as inflation has caused the price of nearly everything to go up in 2022.  With that in mind, the Lock N’ Shop program rolled out this week that can provide homebuyers more certainty by allowing them to lock in their mortgage rate while they shop for their home.

The Concern About Rates

If you’re just getting started in the housing market, you may be wondering what all the fuss is with mortgage rates.  Monthly mortgage payments are broken out by several different factors, including your mortgage rate.  Locking in a low rate can help homeowners save money over the life of their loan, which is why Americans are keeping a close eye on mortgage rates. Since those rates are driven by current economic factors such as inflation, job growth, and the overall economy, mortgage rates have begun ticking upward this year.

New Program Lock N’ Shop

Superior National Bank rolled out a new program this week that can provide certainty to homebuyers who are concerned about mortgage rates. The Lock N’ Shop Program allows clients to lock in a rate for a set period while they shop for a home. This innovative new program alleviates some of the pressure about mortgage rates and gives peace of mind while people shop for their dream homes.  A set-up fee is collected to lock in the rate, but is refunded via a lender credit at closing, making this a great option for homebuyers!

Tips to Make the Most of Lock N’ Shop Program

If you’re looking to lock in the best rate possible with Lock N’ Shop, these three tips can help improve the likelihood of getting the lowest possible rate and make the most of the program:

  1. Keep Debt to Income (DTI) low. DTI is calculated by dividing the total of your monthly debt by your gross monthly income. The threshold for acceptable DTI percentage can vary between program and lender guidelines, but a good rule of thumb is to keep that percentage low. Making extra payments on credit cards and other debts starting with those with the highest interest rates is a great way to do that.
  2. Improve credit score. Lenders typically look at credit score as a benchmark of a person’s ability to repay their loan.  For that reason, having a high credit score can help home buyers score the lowest possible rate.  To improve your score, pay down credit cards (which also helps with DTI percentage) and pay your bills on time.
  3. Save for a down payment. Having money available for a down payment can help you lock in a better rate because that down payment lowers the loan-to-value ratio of the loan.  Generally, the benefits of having 20% to put towards a down payment are two-fold: it can help you lock in a lower rate and in many cases, remove the need for private mortgage insurance.

These tips are a great starting point for homebuyers who are trying to lock in a rate. However, speaking to a Michigan lender is the most comprehensive way to ensure that you’re hitting the targets needed to meet mortgage program guidelines and get the best possible rate.

Keep Reading: 

For more resources on determining your DTI or boosting your credit score, check out these recent blog articles that go into more detail on the subjects:

How to Determine Your Debt to Income Ratio

3 Common Mistakes to Avoid When Trying to Boost Credit Score

Contact Michigan Lender Julie Krumholz to Get Started with Lock N’ Shop 

If you want to learn more about how the Lock N’ Shop program can benefit you, contact Julie Krumholz. Julie is a registered loan officer who has over 30 years of experience in the mortgage industry including underwriting, quality control, processing, closing and loan origination. She provides a wealth of experience to clients and helps them navigate the mortgage industry and the various programs available.

If you’re looking for a lender in Michigan, call Julie from Superior National Bank today at 586-382-5482 to answer any questions and help you through the loan process.