The Benefit of Rate Holds

The term “rate hold” might be something you are familiar with if you have worked with me in the past. If not, it is a term that all prospective buyers should know!

Many mortgage lenders offer a rate hold to clients who are purchasing a new home. The purpose of the rate hold is to secure the interest rate on your mortgage application for 90 to 120 days. Often, these holds range from 90-120 days. Bear in mind, these are typically not provided for anyone refinancing their mortgage or looking to transfer it from one lender to another. Only those looking to purchase a home or establish a brand-new mortgage.

Once you have created an application with me, I can submit it to an available lender who is offering a rate hold on an interest rate you want to take advantage of – all without a property attached.

For an example of how a rate hold works, consider this. You submit your application to a lender for a fixed interest rate of 1.64% for five years. On day 60, that interest rate moves to 2.12%. As long as your mortgage closes in the next 60 days, you are protected and can keep your lower rate of 1.64%. Plus, if rates happen to trend downward, you can also take advantage of the lower interest rate.

This rate hold does not commit you to work with that particular lending institution, nor does it commit you to work with me. It also does not hurt your chances of receiving a mortgage approval down the road! All it does is protect the agreed-upon interest rate for you while you shop the market, so you don’t have to worry about it increasing while you are hunting for your perfect home!

Once the 120 days expires, if you have not found that perfect home fit or want to take advantage of different interest rates, nothing is stopping you from submitting another rate hold! It will just be subject to the current rates on the day of submission.

If you are looking to purchase a new or secondary home this summer, please don’t hesitate to reach out to me to get started on the pre-approval process and put your rate hold in place!

Jay Brennan

Mortgage Agent

Dominion Lending Centres – Estate Mortgages Inc.

Lic#11363

Telephone: 416-795-1079

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