Don’t try to time home borrowing rates. Lock them in for less.

Is this the week you should lock in the mortgage rate on a home you are buying? What about that on a home equity loan or line of credit? Instead of trying to guess the market, invest time and energy in securing the best deal. That’s much easier to control.

If you’re looking for a home equity loan or line of credit, a reduction in the Fed Funds rate will work in your favor. Home equity rates are typically tied to the prime rate, and they generally move in lockstep with the Federal Reserve Open Market Committee’s actions.

Tropical Financial Credit Union is making it easier to borrow with a special discount through Sept 30 of $1,000 credit toward closing costs. Learn more about loans and lines of credit, including the latest rates here.

Fixed mortgage rates fluctuate with long-term Treasury rates, so Fed action will have a lesser effect on them. No matter. Thirty-year mortgage fixed rates have been generally falling since mid-July and are well down from a high of 7.22% at the start of the year, according to Freddie Mac’s surveys. The average of 6.58% on Aug. 21 was the lowest since October of last year.

Could they fall even further? No one knows. But why wait when you can take steps to protect yourself against an unexpected jump and negotiate an even lower rate?

The typical lock-in period on a 30-year, conventional fixed-rate mortgage is 30 days. Here are three strategies for extending it:

• Request a rate lock extension from your lender. Most offer the option to extend your rate lock for a fee. This will protect you against unexpected delays in moving to closing.
• Choose a longer initial rate lock when you apply. Some lenders allow you to lock in a rate for 60, 90, 120, or even 180 days when you apply, particularly if you are building a new home or the seller and you have agreed upon closing three or six months in the future.
• Ask the mortgage lender or broker if it offers loans with a “float-down” option on the rate. While not common, it allows you to secure a lower rate should mortgage rates continue to trend downward.

If you have the cash or can legally secure it from a relative, you can improve your rate. Here’s how:

• Increase the down payment. When you increase it to 10% from 5%, for example, you may qualify for a lower interest rate, especially on a conventional loan, the most common type of mortgage offered.
• Buy down the rate. Prepaying interest through mortgage discount points at closing can reduce your starting rate. One point equals 1% of the loan amount. The cash payment could lower the rate by one-eighth to one-quarter of a percentage point. For example, if a lender quotes 6.75% with 1 point, you could reduce it to 6.625% or 6.5%.
• Boost your credit score. The higher your credit score, the more likely you are to qualify for a lower starting rate. Please request a free copy of your report and visit our web pages on personal finance for advice on how to raise your score.

You don’t have to do this alone. Did you know that your relatives, including aunts, uncles, and cousins, can legally donate funds to you that can be used for the down payment and a rate buydown? You can also use cash received as a wedding or graduation gift. You should have a gift letter to document that the source and amount are legitimate.

The seller cannot give you money, but it can help by:

• Contributing to buying down the mortgage rate by paying for discount points as part of negotiated seller concessions.
• Paying a specific dollar amount or percentage toward the closing costs.

Want to know more? Visit Tropical Financial’s mortgage web page for its latest rates and to request an appointment with a loan officer.