Rate Lock Mortgages

Rate lock mortgages

Rate Lock Mortgages: What you need to know.


What are rate lock mortgages?

Rate lock mortgages are a lender’s offer to secure a certain interest rate for an agreed-upon term. Rate locks protect you from raising interest rates but also keeps you from taking advantage of falling interest rates. Your lender may offer a “one-time float down” option to give you the flexibility of locking at a lower rate.

When should you consider rate lock mortgages?

The best time to lock in your rate is after you have found your lender. Once you have found your lender you should get pre-approved for your home loan for an amount that works for you and your specific financial needs. The rate lock makes it easier for you to keep on budget.

How long do rate locks last?

Rate locks can last from 30 days to 90 days or more. It is best to talk with your loan officer and discuss which term is right for you.


How do I lock in my rate?

Loan officers may offer a rate lock during the loan application process.  This usually will happen after you have submitted your loan application and it has been approved, but before your loan is sent in for underwriting. If you have not heard about your rate being locked at a certain percentage, you can simply ask for one.


How does a rate lock work?

Interest Rates go up: Your rate stays the same, and the rate lock has worked for you.

Mortgage rates go down: You have missed the lower rate unless you have a “one-time float down” option built into your loan, however, you are still on budget.


Is there a fee for a rate lock?

Depending on your lender, they may charge a fee for your rate lock. This could be a fee paid at closing or it could be built into your loan. As your loan officer what you can expect to pay for your rate lock.


Should I lock my rate today?

In the current environment of rising rates, it could be advantageous to lock in a lower rate while you are looking to build or buy your new home. Locking your rate guarantees that your rate will remain the same through your lending and home buying process and gives you peace of mind knowing your budget will not be affected by volatile interest rates.


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