The first significant step in buying a home involves a loan. Most likely, your first decision will be: Should you lock the interest rate. This lock or not decision can be pretty complicated.
If rates are very low, relative to just a few days or weeks ago, you may be tempted to lock in the rate so that once you find the home you already know the interest rate you will pay. It is imperative that you can expect to make an offer and have it accepted when you’ve locked the interest rate. Once locked, it will cost you $$$$ to extend the rate lock if you need it. So before you lock, consult your realtor.
Ask you realtor how quickly homes are selling in the area you are looking at. Are there many offers on the homes for sale? Can you reasonably expect to find a home you like and be the buyer whose offer is expected. In a hot market, you will have to come in aggressively with a offer unlikely to be topped. For data on the market subdivided by type of home and zipcode, go to the San Diego Association or Realtors‘ website. On this particular page, you do not need a password to look up information by zip code, which is then broken down into houses vs condos (townhomes are included under condos). You can also see where the local market is heading, how many foreclosures are available, etc.
The last thing you need to take into account as you consider whether to lock or not, is the broader economy. Is it still going strong, are new jobs being created, is the stock market (considered to be the leading economic indicator) still rising. The government may wish for interest rates to rise or fall depending on what the broader economy is doing. This, in turn, should guide your thinking regarding interest rates.
My typical advice these last couple of years has been to let the rate float. I have had some buyers succeed on their second offer and others on their sixth offer or more. If you want to discuss the specifics of your situation, contact me at 760 622 5087 or [email protected]