is to lock in a mortgage rate, referred to as a “mortgage rate lock.” So, let’s take a closer look at what exactly a mortgage rate lock is. Essentially a mortgage rate lock is “an agreement between a borrower and a lender that guarantees the borrower a specific interest rate on a mortgage.” Bankrate.com expands on this definition of a rate lock as “an interest rate on a mortgage for a period of time. The lender guarantees (with a few exceptions) that the mortgage rate offered to a borrower will remain available to that borrower for a specific amount of time.” With a locked-in rate, you won’t have to worry if rates go up, which is a possibility, in between the time you and your buyer’s agent present an offer and when you close on the home. Mortgage rate locks last anywhere from 30 to 60 days, but they can also last up to 120—and sometimes even longer. Typically, you can find a lender who will offer a rate lock for an agreed-upon length of time without a fee, but if you request an extension, there could be a charge. For example, rate locks of 30 days or less are usually free (some lenders offer free rate locks up to 45 days). Generally, though, after 45 days, the rate lock will start to cost you incrementally higher fees, often in 30-day increments.
Step #6. Know When to Lock in a Rate
So, how do you know exactly when to lock in a mortgage rate? First, know that you can’t lock in a mortgage rate until after you’ve been approved for a loan. (Yet another reason that getting pre-approved for a loan is so important!) Also, I recommend that you decide to wait to lock in a rate until after you’ve found “the one” home (the one that meets your needs and most of your wants) and put in an offer.
Further, plan for this process of waiting for the right time to
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