Seven (Maybe Obvious) Tips for Cutting Costs at Home

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If one of your resolutions is to save money, Rent.com has come up with a few suggestions that it says could save homeowners and renters more than $300 per month. (We’ve arranged them in order of what seems realistic.)

1. Illuminate savings: Replace light bulbs with Energy Star qualified bulbs and save $6 per bulb per year, and nearly $40 over the lifetime of the bulb. (The bulbs are pretty cheap.) This one is small, but small savings add up.

2. Cut the phone cord: No one needs a land line anymore. (This blogger hasn’t had a traditional phone in five years and has never missed having one.) This one could save an average of $35 per month – more if you make a lot of International calls.

3. Use your kitchen: The average American eats out six times per month, spending an average of $172. Cook at home more.

4. Ditch cable: Renters pay, on average, $100 per month for cable television. Does anyone really watch television shows when they actually air anyway? Plus, think of all the extra time you’d have. And you can always catch a show or two on Hulu.

5. Pull the plug: By unplugging appliances and electronics when you are not using them, you can money on energy. Unplugging one fax machine, one monitor, and television can save $70 per year.

6. Skip the hot water – Do your laundry in cold water instead of hot and shave energy usage by 90%. This can save $72 per year.

7. Work out in comfort: Skip the gym membership and save, on average, $775 per year. If you need to exercise, take up running or walking.

via wsj

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Top 5 Reasons to Buy a Home in 2012

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The American dream of homeownership is a very feasible aspiration for 2012.

There are many benefits of owning a home.  Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.

The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.

There are some factors we can be certain about in this housing market such as home values rebounding.  This is true; the housing market often moves in cycles.

It’s safe to assume that many Americans harbored the same uncertainty during the George H. W. Bush administration in the early 1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.

In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability by stating “owning a home can increase responsibility and stake out a man’s place in his community…The man who owns a home has something to be proud of and reason to protect and preserve it.”
This statement is still true more than 50 years later.  There are many reasons to take pride in homeownership such as:

• Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future. Mortgage rates are near historic lows and home prices in many parts of the country are down.  This is the perfect recipe for home appreciation.  Additionally, many foreclosed homes are available for a fraction of the original cost.  This can translate to a higher profit if you decide to sell once the market rebounds.


• Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible.  The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.


• Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset.  Capital assets are given preferential tax treatment.


• Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals.  Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This trend is called equity building.  Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster.  This rapid payment process allows borrowers to:


• Pay off the principal balance faster
• Lock in near-record-low interest rates
• Shorten the length of their home loan
• Own their home faster
• Pay substantially less mortgage interest

Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners.  Also, home equity is the largest single source of household wealth for most Americans.

• Pride – Homeownership offers many benefits to many different types of people.  For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk.  For me, homeownership will permit me to build an NBA regulation size basketball court on my own property.  For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams.  No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.

Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.

via quickenloans

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The Best-Run Cities in America

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9. Chandler, Ariz.
> Violent crime per 1,000 people: 2.86 (14th lowest)
> Poverty rate: 8.2% (6th lowest)
> Adult population graduated from high school: 91.5% (13th highest)
> Credit rating: Aaa (stable outlook)
> Population: 236,775

Chandler is one of the newest large cities in the U.S. The city was incorporated in 1951, but the population did not truly expand until very recently. In 1980, Chandler, which is located within the greater Phoenix metropolitan area, had a population of 30,000. Now, it has a population of 247,000. There are countless examples of cities that experienced this level of growth, but few, especially in the Southwest, that maintained a healthy economy through the recession. And despite home values dropping precipitously in the city, like the rest of the Phoenix region, Chandler managed to maintain a healthy economy. In 2010, the city had the ninth-lowest unemployment rate among the largest cities, and the sixth-lowest poverty rate. Chandler has been assigned a perfect Aaa stable rating by Moody’s. The credit rating agency justified the rating: “The stable credit outlook reflects Moody’s expectation that management will continue to maintain favorable financial operations and strong reserve levels despite ongoing economic weakness.”

8. Scottsdale, Ariz.
> Violent crime per 1,000 people: 1.53 (6th lowest)
> Poverty rate: 7.9% (4th lowest)
> Adult population graduated from high school: 95.9% (the highest)
> Credit rating: Aaa (stable outlook)
> Population: 217,977

Like Chandler, Scottsdale is a prosperous suburb of Phoenix. It has the seventh-highest median income in the country, the highest percentage of high school graduates, and is among the top 10 for unemployment and health insurance coverage. However, because of its close proximity to Phoenix, home values dropped substantially during the recession. Nevertheless, the city has managed to maintain healthy employment and low poverty, as well as a stable Aaa rating — the best a city can receive. According to Mayor W. J. Lane, “Scottsdale has weathered the recession with our Aaa bond ratings intact because we cut where we need to cut and we invest where we need to invest.”

click here to find out The Best and Worst Run Cities in America

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Unemployed With Mortgage Trouble? Freddie, Fannie to Expand Help

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Job growth may be picking up, but the ranks of unemployed remain large, and plenty of Americans are trying to figure out how to pay the mortgage while they’re out of work.

Offering those borrowers a break on their mortgages has long been idea considered by policy makers, but two of the industry’s biggest players — mortgage giants Fannie Mae and Freddie Mac — have only offered limited relief.

Months after a similar move by HUD Secretary Shaun Donovan, unemployed homeowners with loans guaranteed by Fannie and Freddie could now be eligible for reduced or suspended mortgage payments for up to a year. The government-controlled mortgage finance companies emphasized that they were doing so at the direction of their regulator, the Federal Housing Finance Agency.

Starting Feb. 1, Freddie Mac said it will allow companies that collect mortgage payments to give borrowers up to a 12-month break on their mortgages, up from a current level of six months. However, the break, known in the mortgage industry as forbearance, will only be temporary. Borrowers will still owe the payments they have missed.

“These expanded forbearance periods will provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new employment and resolve their delinquencies,” said Tracy Mooney, a Freddie Mac senior vice president. “We believe this will put more families back on track to successful long-term home ownership.”

Freddie Mac didn’t have an estimate available for how many borrowers would qualify.

In the past, mortgage companies could suspend borrowers’ payments for up to three months without Freddie Mac’s written approval, or for six months with prior approval. The company said it did grant longer forbearance terms, but only for events such as natural disasters.

Under the new policy, those mortgage companies will be able to automatically extend the borrower’s forbearance for six months and expand it to a year with Freddie Mac’s approval.

A spokesman for Fannie Mae said the company has “received the same directive from FHFA as Freddie Mac and will be implementing similar changes to our unemployment forbearance guidelines.”

via wsj

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Your Credit Report Will Be Re-Pulled Just Prior To Closing (And It Could Change Your Loan Terms)

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When does "cleared to close" not mean "cleared to close"? When Fannie Mae's involved, that's when.

Fannie Mae's "Loan Quality Initiative"

Fannie Mae doesn't make loans. Rather, it buys loans from banks and securitizes them into mortgage-backed securities. As such, Fannie Mae wants to make sure that every loan it buys to meet its basic underwriting standards. That way, it can stand behind the quality of its securities.

And, when we talk about loan approvals, this is actually what's happening; your loan is being underwritten based on Fannie Mae's guidelines. Loans approved for closing are -- presumably --  in line with Fannie Mae's minimum standards.

We say "presumably" because when foreclosures began to increase last decade, Fannie Mae started an audit of its loans and found large numbers of mortgage that had failed to meet its standards. Some loans, it found, were grossly underwritten, comprising its securities and its bottom-line.

To limit "bad loans", Fannie Mae created its Loan Quality Initiative.

The Loan Quality Initiative is broad in scope, comprising 9 pages. For banks, it creates "extra steps" in underwriting. It's validation of things like social security numbers and borrower occupancy. They're small tasks, but time-consuming, and there's a lot of them.

As a mortgage applicant, you don't have to worry about what the bank is doing. You have one task only -- don't mess up your credit.

Just Before Funding, Your Credit Will Be Repulled

The Loan Quality Initiative requires lenders to re-verify credit credit profiles just prior to closing and to look for changes. In other words, although your credit was pulled at the start of underwriting, Fannie Mae wants your bank to pull it again -- just in case something changed.

This ensures that loans are priced properly, and are funded on the borrower's risk at closing as opposed to at application; because a lot can change while a loan is in-process. Especially when the loan is for a purchase closing in 60 days or more.

Banks will repull your credit prior to closing. Some of the things they're looking for include :

• Did you apply for new credit cards while your loan was in-process?
• Did you run up existing cards while your loan was in-process?
• Did you finance an automobile while your loan was in-process?
• Did you make some other major purchase while your loan was in-process?
• Did you add non-disclosed debts while your loan was in-process?

Each of the above is a red flag to underwriting. If your "final" credit report doesn't match your original credit report, your mortgage may be subject to a complete re-underwrite and, in a worst case scenario, a loan application denial.

The 3 Credit Hotspots For Loans In-Process

The Loan Quality Initiative is pretty straight-forward and common sense-like. As a mortgage applicant, it's easy to avoid its claws. There are 3 things for which an underwriter is looking in your credit file.

Here are those 3 items how the bank will react.

What the bank will do: Recalculate debt-to-income ratios using your "new" minimum payment due figures. If the DTI exceeds Fannie Mae's maximum threshold, the loan will be denied.

What you should do about it: Don't run up credit cards prior to closing -- even for layaway items. Consider paying more than the minimum due, just in case.

What the bank will do: Use your new credit score to assess loan-level pricing adjustments or outright denials for when scores fall below Fannie Mae's minimum credit score requirement.

What you should do about it: Follow the basic rules of keeping your credit score high -- pay your bills, don't let things go into collection, and don't look for new credit unless necessary. myFICO.com has a terrific series on credit scoring you can review.

What the bank will do: Look at the Credit Inquiry section of your credit report to look for "non-disclosed liabilities". If items are found, the bank will ask for supporting documentation on the inquiry, and will use the information to re-underwrite your mortgage.

What you should do about it: Don't go looking for new credit until after your loan is funded.  Period.  Now re-read that first sentence, please, to help it sink it.

And remember -- this is all happening after your loan has reached "final approval" status. You should protect your credit all the way through funding. Don't buy new furniture on credit the day before you move in; or buy a car for that new garage.

Loan Approvals Tough, But Not Impossible

Fannie Mae began its Loan Quality Initiative to improve its loan pool's overall performance.  Better loan quality helps to keep conforming mortgage rates down and reduces the taxpayer burden of bad loans.  That's two big wins.

Unfortunately, the Loan Quality Initiative can also result in additional mortgage turndowns and broken closings.

Therefore, be extra careful with your credit between your application date and closing.  If you must buy something big, consider paying cash or waiting it out.  major purchases on your credit card can be grounds to revoke an approval.

Even if your loan is cleared-to-close.

Apply For A Mortgage With Great, Low Rates

Fannie Mae's Loan Quality Initiative applies to Fannie Mae loans only. It does not apply to FHA mortgages, USDA loans, VA loans or jumbo loans. However, it's still good smarts to keep your credit clean while your loan is in-process.

via themortgagereport.com

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Phoenix-area housing may be on the mend

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All signs indicate recovery is under way, experts say

Data from the end of 2011 suggest that a housing-market recovery has begun in metro Phoenix.

The upswing in the market will surprise many because it comes less than five months after the region's existing-home prices fell to their lowest level since 1999. But even at last year's low point in August, when the median home price fell to $112,000, many market indicators pointed to an increase in the area's home prices by year-end. Now, it appears they were right.

The median price of a metro Phoenix home rose to $120,000 in December, its highest level since November 2010, according to the Information Market, a real-estate data firm. That was the first December since 2005 that the region's median price didn't drop.

The number of home sales in 2011 climbed to their highest level since the housing market's peak in 2006. Foreclosures fell to their lowest level since 2008. And the number of Phoenix-area homes listed for sale has dropped to a figure not seen since 2005, indicating demand is finally exceeding supply. This is a complete turnaround from 2007, when the housing crash started and cheap foreclosure homes flooded the market while buyers were few.

Now, investors are snatching up both foreclosure and short-sale houses at a record pace. Regular buyers, who need a mortgage to purchase a home, are having a hard time competing with cash-paying investors.

"The housing market definitely saw the bottom in August or September of last year," said Mike Orr, new director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University.

He continues as publisher of the "Cromford Report," an online daily real-estate market analysis. "I talked to 200 Realtors the other day, and almost all were much more positive about Phoenix's housing market then they were just two months ago."

Experts agree on roughly what a healthy market looks like: The number of home listings holds steady, and sales keep pace. Foreclosures are few, and median sales prices inch up steadily, but not so quickly that they become volatile.

The end of 2011 began to look more like that ideal than it has in recent years.

Home sales climbed to almost 95,000 in 2011, a near-record for annual resales in metro Phoenix.

During the boom, annual sales climbed above 150,000, although more than 60,000 of those deals were for new homes. Now, new-home sales are averaging about 600 a month.

Arizona homebuilding analyst R.L. Brown said the construction of new houses won't pick up until the supply of inexpensive foreclosure homes dries up. New homebuilding could increase this year if foreclosures continue to slow.

The number of homes listed for sale in metro Phoenix is down to 25,000, compared with 43,000 a year ago, according to Cromford. Only 9 percent of the homes on the market are lender-owned foreclosures. A year ago, 20 percent of the homes were foreclosures that lenders were trying to sell inexpensively.

Foreclosures started to climb in late 2007 and peaked in 2010 at almost 50,000. Last year, the number of homes taken back by lenders fell by 16 percent from the year before. Pre-foreclosures steadily fell in 2011, so foreclosures could fall again this year.

It has been a year of ups and downs for the region's housing market, making it more difficult to predict or time a recovery.

One month, home sales were down and prices were up, while the next month foreclosures might tick up as home sales climbed.

Metro Phoenix's housing market became fragmented during the crash. Inexpensive homes sold more quickly than luxury houses during the past few years, keeping the area's median home prices lower.

The market has also reverted to being driven largely by location. A house in north Phoenix might go for the asking price, while a house farther out in Queen Creek or Buckeye might sell in a short sale for half of what the owner owed.

Some market watchers still don't believe a real recovery has started.

Phoenix real-estate agent Brett Barry with HomeSmart thinks "lenders are just kicking the can down the road," drawing out the foreclosure process so the market looks better than it is actually doing.

"Any stabilization in 2011 is a temporary bottom," he said. "Banks are now letting many owners miss 24 to 36 payments before finally foreclosing. This is a sea change as these homes don't appear on any radar screens until they do foreclose."

He thinks those potential foreclosures will drive down prices more.

Early in 2011, the Arizona Regional Multiple Listing Service's pending- sales index showed metro Phoenix's median home price would fall to $100,000. It didn't drop that much, although it did fall to $112,000 after hovering around $115,000 for the first six months of last year.

But now that the region's median is climbing up, foreclosures and listings are down and sales are at a nearly record pace, a growing number of real-estate analysts say the market recovery has started.

"Six months ago, we saw a drop in prices coming. But based on other indicators, it was obviously going to be temporary," said Tom Ruff, analyst with the Information Market. "Now, we are finally seeing year-over-year gains in pricing and sales. The housing market's recovery is on track."

via azcentral

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Housing struggles in two Chandler ZIP codes

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Two Chandler ZIP codes continue to log more distressed properties than any others in the Southeast Valley, according to the latest Arizona Regional Multiple Listing distressed-properties report that tracks short sales and foreclosure listings.

Area real-estate experts say that the housing market is recovering, however, and that the Chandler numbers aren't as bad as they appear.

"The situation is improving steadily and we're way past the worst, which was 2009," said Mike Orr, a Mesa housing-market analyst and founder of the Cromford Report. "Far fewer homes are in foreclosure."

The geographic breakdown of distressed properties does not present a true picture because Chandler ZIP codes cover larger areas with higher housing densities than those in neighboring communities, according to Orr.

"Chandler has relatively large ZIP codes," Orr said.

That could be why the central city 85225 has 199 short sales and foreclosures on the market and southeast Chandler's 85249 has 177, more than any others in the region. Several ZIP codes in Mesa, Tempe and Gilbert have more than 100 distressed properties on the market.

However, those numbers are lower than those reported last month, and Chandler's 85225 no longer is among the Valley's top five spots for distressed properties. The five are now heavily concentrated in the Valley fringes and include parts of Laveen, Surprise, Goodyear, Buckeye and Anthem. At the top is Maricopa's 85138 ZIP code, which has 233 short sales and foreclosures on the market.

Bob Behm, the listing service's CEO, said average home prices across the Valley have increased 4.6 percent since October, and homes are on the market for shorter time periods. However, he does not expect the prices will continue to climb at that rate because buyers are more cautious than they were before the recession and rapidly escalating housing costs "are what got us into trouble in the first place."

In another time, home prices would be climbing faster after a recession, according to Orr, especially given the rising demand and shrinking inventory.

"This is an unusual situation where perception trumps reality," Orr said. "There is a negative sentiment toward housing and people don't want to pay the higher prices, so they walk away."

Many of today's buyers are investors and winter visitors, said Chandler real-estate agent Pam Bernard.

"I have a steady stream of buyers from Canada looking for amazing deals," she said.

Investors are buying rentals, catering to a growing population of former homeowners displaced by foreclosures and short sales, she said.

The housing collapse has changed buying habits. More couples are using only one income to qualify for home loans just in case something happens to their jobs, and some potential buyers are holding off and renting for a couple of years just to see what happens, Bernard said.

Distressed properties on the market

Includes foreclosures and short sales.

Chandler:
85225: 168
85249: 161
Click here to search Foreclosure & Short Sale Home in Chandler

Gilbert:
85296: 147
85295: 138
Click here to search Foreclosure & Short Sale Home in Gilbert

Mesa:
85207: 145
85204: 93
Click here to search Foreclosure & Short Sale Home in Mesa

Tempe:
85282: 92
85281: 87
Click here to search Foreclosure & Short Sale Home in Tempe

Ahwatukee Foothills:
85044: 91

85048: 90
Click here to search Foreclosure and Short Sale Home in Ahwatukee

via azcentral.com

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INSIGHT 2012 - The Arizona Real Estate Summit

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Attended a great event this morning at Ocotillo Golf Resort with great and honorable speaker Arizona Department of Real Estate Commissioner Judy Lowe gave us a insight and up coming plan of the department on this coming year.

The most interesting speaker, I personally think will be Michael Orr from The Cromford Reports. The tittle "AZ Statistics That Will Change Your Way of Thinking", how true is it?

Here are some market insight presented by Mike based on statistics for Greater Phoenix Market.



Foreclosure Summary

• We are about 85% through the disaster
• REOs are becoming an endangered species
• Banks increasingly prefer short sales
• 3rd parties becoming trustee's primary buyer
• HARP 2.0 is proving effective for Arizona
• A government program that actually works!
• Fannie/Freddie loans only
• 2012 will be a very different market

Predictions for 2012 (warning - these may or may not come true)

• Phoenix will not behave like the national market
• Case-Shiller Index for Phoenix will rise for the next 2 months
• Supply shortage will get worse
• Foreclosure levels close to normal by end of year
• Distressed properties will get scarcer
• Lenders will slightly ease loan underwriting
• Buyer sentiment will improve
• Builders will start to re-enter the market
• Pricing will get more interesting.

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Median Sold Price in Ahwatukee, Chandler and Gilbert (December 2011)

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Median Sold Price in Ahwatukee, Chandler and Gilbert (December 2011)

As 1/2/12. source armls. Information is deemed to be reliable, but is not guaranteed.

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Refinancing Gets Even More Attractive

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Homeowners who have resisted the urge to refinance their mortgages until now could be rewarded for their willpower. Mortgage rates have fallen to new lows—and banks are rolling out incentives to win business.

Economic uncertainty in Europe and slow growth in the U.S. are prompting investors to pile into ultrasafe U.S. Treasurys. That, in turn, is pushing down mortgage rates, which are tied to Treasurys.

The average interest rate on a 30-year mortgage fell to 4.05% for the week ended Dec. 23, the lowest in 60 years, according to HSH Associates, a mortgage-data firm. And rates on jumbo mortgages—private loans that in most parts of the country are larger than $417,000—also have hit new lows, averaging 4.61%.

"It's hard to argue rates will get much lower than they are today," says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles.

That's good news for homeowners. A person who refinanced a $400,000 30-year mortgage in February would pay an interest rate of 5.04% on average, according to HSH Associates, and fork over $2,157 a month; at the current rate of 4.05%, he'd save $236 per month, or $2,830 per year.

What's more, demand for refinancing is declining, since many homeowners already took advantage of lower mortgage rates. Applications for refinancing are 17% below this year's peak in September, according to the latest data from the Mortgage Bankers Association.

That and other factors have prompted some lenders to offer incentives to win new business—particularly regional and community banks, which are focusing more on jumbo mortgages, says Stu Feldstein, president at SMR Research, which tracks the mortgage market.

The discounts can be sizable. Regional bank Valley National Bank charges homeowners in New Jersey and eastern Pennsylvania a flat fee of $499 for closing costs on mortgages as large as $1 million. Since average closing costs on a refinance run about 2% of the total loan amount, a person with an $800,000 mortgage could save about $15,500.

A spokesman for the bank says it is aggressively marketing the discount in part to bring in more customers.

While many lenders don't refinance mortgages that are larger than about $2 million, Union Bank—which has branches in California, Oregon and Washington—refinances up to $4 million at no extra cost. (Many banks that refinance multimillion-dollar mortgages tack up to an extra quarter of a percentage point on the interest rate.)

Since November, Union Bank has also allowed borrowers to roll the costs of a refinance, like the appraisal fee and loan processing fee, into the mortgage. And borrowers whose original mortgage is from Union Bank don't have to provide all of the income documentation that other customers do in order to refinance.

In part, the bank's goal is to develop relationships with high-net-worth clients, says Stuart Bernstein, national production manager of residential lending at Union Bank.

Despite the incentives, many would-be applicants remain sidelined because they can't meet the long list of qualifications.

The home-equity requirement is one of the toughest hurdles, says Mr. Feldstein. Homeowners with at least 10% home equity make the cut, but people with less have a tougher time.

Borrowers with 10% to 19% equity in their home usually have to buy private mortgage insurance, whose cost varies based on many factors, including their credit score. A borrower with 15% equity and a FICO credit score above 720 could pay 0.44% of the total loan amount, says Keith Gumbinger, vice president at HSH Associates. On an $800,000 loan that would be $3,520 a year—eating into the potential savings of a refinance.

In December, the federal government rolled out a revamped version of the Home Affordable Refinance Program with relaxed home-equity requirements, to allow more borrowers to refinance. To qualify, the current mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae, and borrowers need to be mostly current on payments.

For regular refinancing, applicants need a FICO credit score of at least 740 to get the best rates, says Mr. Gumbinger. And they must provide copious documentation, including at least two years' worth of tax returns and proof of income as well as recent statements for assets such as retirement and brokerage accounts.

After clearing those hurdles, you might wait about 60 days for refinancing to be completed, says Mr. Gumbinger—longer than the typical 45 days. While some lenders are offering 60-day rate locks for free, others charge a quarter of a percentage point of the total loan amount for the service. On an $800,000 mortgage, that's $2,000.

Or you could opt to take your chances with a free 45-day lock and hope rates don't spike between day 46 and the date your loan closes. With the euro zone still in economic crisis and global investors rushing to the safety of U.S. Treasurys, housing-market analysts say it could be at least six months before rates rise significantly.

By AnnaMaria Andriotis | The Wall Street Journal

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