Commonly Asked Mortgage Rate Lock Questions

Q: What does it mean if I lock my rate today?

A: If you lock your rate today, then as long as you can close on your home within the set time period (30, 60, or 90 days), you are guaranteed to have that interest rate on your loan.

Q: What rate lock time frame does a Loan Estimate provide?

A: Every rate lock agreement is different. Traditionally, rate lock periods can be as short as 15 days or longer than 90 days. Your rate lock time frame will be whatever you are comfortable with and can afford.

Q: Is a shorter or longer rate better, and at what cost?

A: Cost is something that needs to be considered when choosing to have your rate locked. While the actual rate lock is free, the length of time the lock lasts for will impact the overall cost of the loan. In this regard, choosing a shorter rate lock is less expensive than choosing a longer rate lock period because the shorter the term, the more risk the lender is taking on.

Q: What if my closing is delayed and the rate lock expires?

A: If it takes longer than expected to close on your home and the rate lock ends up expiring, then the guaranteed interest rate is no longer a part of the equation. The lender may offer an extension on the lock, but they don’t have to if they don’t want to. If you cannot get an extension on the lock, then you will have to pay whatever the market rate is at the time of closing.

Q: If I lock my rate, are there any conditions in which my rate could still change?

A: No. Once your rate is locked, you are guaranteed that rate as long as you close within the set time period. If the market rate drops while your rate is locked, you can ask for the rate lock agreement to be rewritten to reflect the new rate, but this can be expensive.

Q: When should I lock my rate?

A: Ideally, the closer you are to closing, the better it is to lock in your rate. If you lock your rate too early, there is a risk that you might not close in time. Locking your rate in approximately one week before the expected closing is usually ideal because it gives you some time to work with should the closing be delayed for any reason.

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