Rate Lock
What Is a Rate Lock?
A rate lock is a lender’s commitment to hold a specific mortgage interest rate for a set period of time during the loan approval process.
It protects borrowers from rising interest rates before closing.
Rate locks are commonly used in home purchases and refinances.
Why a Rate Lock Matters
Mortgage rates can fluctuate daily.
A rate lock:
- Secures your quoted rate
- Protects against market increases
- Provides cost certainty
Rate locks typically last 30 to 60 days, though terms vary.
Mortgage rate practices are influenced by guidelines from entities such as Fannie Mae and Freddie Mac.
How a Rate Lock Works
You apply for a mortgage.
Lender offers a rate.
You lock it for a defined period.
If rates rise, your locked rate remains.
If rates fall, float-down options may or may not apply.
FAQs About Rate Locks
Is a rate lock guaranteed?
Only for the specified lock period.
Does locking cost money?
Sometimes, depending on lender policy.
What happens if closing is delayed?
You may need a lock extension.
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