Knock, which offers innovative home financing solutions that make homebuying certain, convenient and cost-effective, today announced the launch of Lock and Shop, a new program that empowers homebuyers to confidently shop for their dream home knowing that they’ve locked in a mortgage rate for up to four months.
Lock and Shop1 was created to give homebuyers certainty in today’s volatile rate environment, where mortgage rates have fluctuated by as much as 55 basis points2 on a weekly basis since June, and now appear to be headed higher through the end of the year.
With Lock and Shop, buyers have the ability to lock in a mortgage rate for a period of 60, 75, 90 or 120 days depending on their purchase timeline. Should mortgage rates move lower by the time they are under contract on their new home, buyers may have the opportunity to float down their interest rate to capture some of the improvement.
“Buying a new home is stressful enough. With mortgage rates doubling since the start of the year and more rate increases expected as the Fed takes action to combat inflation, many homebuyers now have the added pressure of feeling as though they have to rush to close on a home before rates go even higher,” said Knock Co-Founder and CEO Sean Black. “Knowing that they can make a competitive offer and they’ve secured a mortgage rate, Lock and Shop allows homebuyers to confidently shop for their dream home without feeling the pressure of today’s volatile rate environment.”
A qualifying homeowner who expects to buy a home in the next 60 days can utilize Knock’s Lock and Shop program to lock in a 30-year fixed rate conventional mortgage through November at 6.5% (6.561% APR) with no costs. Locking in that same 6.5% rate for 120 days would cost $4,669 (6.692% APR), which would be paid at the time of closing. Without Lock and Shop, a 55-basis-point increase in mortgage rates over the same time period would increase a monthly mortgage payment by $128 or $46,000 in additional interest over the life of the loan. A 100-basis-point increase over the same period would increase the original monthly payment by $235 and the total interest paid by more than $84,6003.
Lock and Shop can be used with Knock’s Home SwapTM, the innovative home loan solution that empowers a homeowner to buy before they sell, and Knock GOTM (Guaranteed Offer), which offers first-time buyers the ability to compete with cash offers at no cost.
Lock and Shop is Knock’s latest offering to help buyers navigate the current housing market. In August, the company gave Home Swap customers the ability to leverage the product’s interest-free equity advance loan to buy down their mortgage rate and increase their down payment to as much as 30% to lower their monthly mortgage payments. When combined with the Home Swap, customers can also use their equity advance loan to cover the cost of an extended rate lock through the Lock and Shop program.
Knock partners with more than 350 real estate