A mortgage rate lock is an offer provided by a lender stating that the current loan interest rate will be guaranteed for a particular period. You may have to pay a fee for this, but it’s often worth it when mortgage rates are rapidly rising.
When to Lock Your Rate
The best time to lock in your mortgage is when rates are on an upward trend. Therefore, you’ll want to monitor mortgage rates near you after getting pre-approved and before applying.
Ask any advisers for their opinions.
How to Lock in a Rate for Home Mortgage Loans
If you’re looking to lock in your mortgage rate, it’s essential to know how to do so. It’s relatively simple. Here are the steps to follow:
1. Ask about Time Frames
Make sure to ask your lender when you’ll be able to lock the rate. Generally, the answer will be whenever you submit your application. Also, ask if the float-down method is an option.
2. Inquire about Costs
Sometimes you have to pay a fee for initially locking in your rate or extending the time length of the lock. Additionally, in case you decide to cancel your application, you’ll want to know if this fee can be refunded.
3. Create a Timeline for Your Home Mortgage Loan
Next, you’ll want to create a timeline, which is generally guided by the closing date decided when you signed the loan agreement.
4. Look at Mortgage Rates
Monitor the current trends. If they are rising, this is optimal for making the call. However, if they are on the decline, it’ll likely be unnecessary. Ask your lender for advice.
5. Ask for the Lock
Once you’ve finally decided that this is a step you want to take, it’s time to make it final by contacting your lender and asking for a rate lock. When doing so, you’ll want to have your time frame ready to present.
How Long Can You Lock Your Rate?
The answer to this question varies depending on the lender. However, generally, the options are 30, 45, or 60 days. Sometimes you’ll be able to have more time; however, the more time you get, the higher your fee will be.
Overall, look for a period that suits your needs and is long enough to close and complete any contingencies.
Contact Us Today!
If you’ve decided that rate locking might be a move you want to take for your home mortgage loan, we’re here to help. Call Mortgage Solutions Financial to get started with your application today or learn more about the homebuying process.