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What Is A Mortgage Rate Lock

If you are looking to purchase a home, or even considering it, chances are you have been keeping an eye on mortgage rates. A big topic of discussion lately is the increase in interest rates, as they have changed considerably in 2022. If you will need a mortgage to finance a home, this could have a significant impact on your loan and home purchase. Rates can change daily, sometimes more than once a day, and that can include rates rising or falling. Being informed and knowing your options is critical, particularly with the shifts and changes we have seen thus far in 2022.

So what is a mortgage lock anyway? According to an informative post from, "A mortgage rate lock guarantees the rate on your mortgage stays the same from the time you are first quoted a rate to the time you close." But how do you know if a mortgage lock is right for you? Consider some important additional information along with some pros and cons.

Additional Information on a Mortgage Rate Lock

  • Mortgage interest rate locks are property and situation specific. In some cases, you have the opportunity to lock your mortgage rate once you've been approved for your loan and decided on a lender.

  • In other instances, you cannot lock your interest rate until you go under contract on a property.

  • Depending on the terms of your rate lock, it is important to keep an eye on the lock's expiration date, as it could expire before your closing date, especially if your rate was locked before you went under contract on a property.

  • Length of the lock can vary among lenders, but many offer short-term and long-term locks. Short-term locks are typically 20-90 days, while long-term locks can range from 90-360 days.

  • In addition to the interest rate, you will also want to consider any fees and the level of service you will receive from your lender as these will both impact the buying process, and the fees can impact your overall costs.

  • Canceling or changing an interest rate lock is situation specific and is an important discussion to have with your lender before completing a rate lock.

  • Many lenders will offer a mortgage rate lock for free, but only for a certain amount of time. Rate locks of more than 30 days will typically incur a fee.

  • Interest rate locks do not apply to the life of your loan. If interest rates go down in year two of your loan, for example, you have the opportunity to refinance your loan for a lower interest rate.

  • It is important to shop around to more than one lender, as terms, conditions, fees, and more can vary from lender to lender. This applies to big national banks and smaller, local banks.

What Are the Pros of A Mortgage Rate Lock?

  • It can significantly help with planning and budgeting because you know your interest rate ahead of time.

  • You can save money if interest rates go up during the time of the rate lock.

  • It gives many buyers peace of mind by removing a significant variable of the home buying process.

What Are the Cons of A Mortgage Rate Lock?

  • Free mortgage rate locks are typically 30 days or less, depending on the lender.

  • You may not be able to lower your mortgage interest rate to the current level if rates go down during your rate lock.

  • Even in the event of a rate decrease, some lenders have an option, called a float-down option, where even if a buyer has a rate lock, they can still get a lower rate from the lender. Depending on the lender, this option could incur a fee. It is also important to note that they may not get you down to the current rate, but will often end up somewhere in the middle. Asking about a float-down option is an important part of the discussion when choosing a lender.

We hope this information is helpful in understanding additional options when buying a home. We are always here to help with additional questions you may have.

Please note this important disclaimer: This information is not loan advice. Please reach out to a mortgage professional(s) for advice about your individual situation.


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