This is a YouTube video titled "How Interest Rate Locks Work" containing an explanation about how interest rate locks function in real estate transactions, focusing on factors like borrower credentials, property type, timing, and the cost implications of different lock durations. The content is a monologue or single-speaker explanation recorded on August 25, 2023.
An interest rate slot for a specific person on a specific property for a specific amount of time. Of course the person their credentials matters. And it's the credentials that are most current. Once you go under contract, if you were pre approved a year ago, the credit could be a little different, the income a little different, that could slightly adjust the interest rate. Obviously the property has a pretty big role. A single family home is different than a condo, different than a multi unit, different than a townhome. Those all come with a little bit different pricing or the interest rates for each type of property. And then the timing is the big one. This is why most rates are locked for 30 days once you go under contract. Think of it like a stick of Dynamite. And the 30 day rate lock is your fuse. This is Also why a 60 day rate lock or a larger fuse, longer fuse cost more, that's a little bit riskier. That investor has to hold in that deal for a longer amount of time. Even though the market's changing, they won't change their deal. That's why it's a little bit higher cost to do a longer term rate lock or to extend the rate lock. And then once the stick of dynamite fuse runs out, boom. The interest starts, the investors begin. And that's why it's so time sensitive. You can't just indefinitely lock a rate in because they don't know what the market's going to do, they don't know what property, they don't know what your credentials are. So it's all time sensitive. Interest rates locked when you go under contract.
