Let’s look at a few frequently asked questions about when and why you should secure your mortgage with a rate lock. Usually, you won’t see a fee with an initial rate lock. The fee is typically baked into the rate. You may, however, pay extra to extend your rate lock or lock it again once the initial period expires.How much does it cost to lock in a mortgage rate?
Lenders may charge a fee to extend or relock your rate in the form of mortgage points, which would slightly increase the rate. Rate lock policies on fees, initial time periods and extensions can vary between financial institutions and loan type. Ask your lender for the specifics around locking your rate.
Does my loan type affect the mortgage rate lock?
The type of mortgage may affect the specifics around your mortgage rate lock, including whether they’re eligible for a lock and whether you can extend the lock. Deciding when to lock in your interest rate is part of the mortgage process, regardless of the loan. Although, your loan type can impact other aspects of your mortgage.
How long is a mortgage rate lock good for?
Some mortgage lenders offer long-term mortgage rate locks, including 90-day lock periods. However, rate lock agreements are typically no shorter than 15 days and no longer than 60 days. You may pay a fee if you want a longer rate lock period.
What happens if my mortgage rate lock expires before closing?
If your interest rate lock expires before you close, you have two options: close with the existing mortgage rate or pay for a rate lock extension.
Speak with your lender if you’re concerned about paying rate lock extension fees. They should have a good idea of how long the underwriting process will take and can recommend the best rate lock period for you.
