Get the lowest mortgage interest rate: lock your rate

You’re getting ready to close and you’re wondering, “Should I lock in my rate?” If you’re happy with your current interest rate and think it’s low, you may want to lock it in and not worry about fluctuating rates on the open market. If you want the interest rate to be lower, and you believe that if you wait, interest rates may decrease, then you can either wait or request a long-term floating option rate lock. Although it is a possibility, long-term rate lock opens the possibility for the rate to increase while you wait for a decrease and often carries fees.

What is a mortgage rate lock?

A fixed rate guarantees that the interest on the mortgage will not exceed a certain rate if the loan closes before the due date. For example, if you lock your rate to 6 percent 28 days before closing and rates increase over the next month, your loan rate will not change if you close on time. If you were to decide not to block and the rates went up, you would end up paying the higher rate.

When locked, fees are common when the lock is secured longer than 30 days, and especially if locked longer than 60 days. If the rate is locked before 30 days, in most cases you will not be charged a rate lock fee.

Long Term Mortgage Rate Locks

Many long-term locks, say a 180-day lock, offer a float down option, which means that if rates have gone down while you’re closing, you can lock in the lower rate. Remember, though, that the interest rate isn’t yours until you’ve locked in your rate. Mortgage rates change every day, sometimes more than once, and until you have told your lender to lock the rate on your loan, your interest rate will change daily as well.

Written confirmation for mortgage rate lock

When you lock in your rate, be sure to get this confirmation in writing. The written confirmation must include the rate, expiration date, and all terms and fees. This step is crucial and will eliminate any misunderstanding about your fee in the future.