When Joel and Emily Sanford decided to build with Allen Edwin Homes last summer, mortgage rates were near all-time lows. Then, while their new home was under construction, rates suddenly started rising. By the time the couple’s new build in Allen Edwin’s Pennridge Trail neighborhood near Kalamazoo was finished in June, some homebuyers were taking out mortgages with interest rates above 6%. But the Sanford family happily closed on their loan at 4%, thanks to a rate lock program that let them set the number in stone months earlier.
“I wasn’t really paying attention to interest rates because I knew we had that rate lock, but then everybody started talking about how interest rates were skyrocketing,” Emily Sanford said. “I felt very relieved knowing that we had the rate lock.”
Building a home has a lot of moving parts that come together over the course of nine to 12 months. For many homebuyers, a mortgage rate is one of the biggest pieces. And given the volatility of financial markets these days, watching that rate while your new home is being built can feel like a roller coaster ride that’s totally out of control.
Who knows how high mortgage rates might go in the next 12 months? Read more by
clicking here.
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* This is NOT a commitment to lend. Financing example is based on the sales price with a 5% down payment. Mortgage is a 30 year Fixed Rate Mortgage loan with an interest rate of 5.990% fixed with 2 points (APR to be determined by a lender). Monthly principal and interest are included in the above payments. Monthly taxes, mortgage insurance and hazard insurance are not included in the payments for this loan program. HOA dues are additional and not included in the above payment. Maximum loan amounts are based on county limits and vary between counties. See a lender for information. Not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision. Interest rates, payments, terms and availability of this loan program, and the sales price, are examples only and are subject to change without notice. Interest rates may not be available at the time of loan commitment or closing. Loans are subject to credit approval. Restrictions and conditions may apply. Interest rate and APR for Fixed Rate Mortgage (ARM) programs are subject to increase or decrease. Rates are quoted as of 5/3/24.