from start to finish (closing). Some closing processes can be drawn out, lasting a month or even longer. If you suspect this will be the case for you, have a chat with your lender about locking down a rate for the full length of that drawn-out process without paying penalty fees. Often, if you talk to the lender ahead of time, you can avoid paying for mortgage rate lock extensions later on. Please note that if the home doesn’t close before the end of the agreed-upon mortgage rate lock period, then the guaranteed rate that you “locked in” will expire, and further, any deposit that you paid could be forfeited to the lender. If the expiration date passes because of something you failed to do, or something you did that you shouldn’t have, then most likely you’ll be out of luck for that rate you tried to lock in. However, if the date passes because of the lender’s action or inaction, then the original rate you agreed on could still be available. Don’t make the mistake of assuming that a mortgage rate lock will provide unlimited protection. Yes, a lock will certainly protect you against rising interest rates when the market shifts, but a lock will also prevent you from taking advantage of an even lower interest rate if rates fall when the market shifts in the other direction. Before you enter into a rate lock agreement, ask your lender if they will offer you a “one-time election,” or a mortgage rate lock “float down,” which will allow you to exchange your current rate for a lower rate if prevailing rates have generally fallen. BE PREPARED FINANCIALLY Finally, before locking in a mortgage rate, be sure that you are financially prepared for this step. Financial preparation is key to the totality of the home-buying process, and locking in a rate is no exception. If you find and try to lock down a
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