Feb 04
What Is a Rate Lock?
When obtaining a mortgage loan, it’s important to find a lender who is willing to offer a rate lock. A rate lock, also referred to as a lock-in, means that the lender issues a commitment to a specific interest rate for a specific period of time. During that period of time, the interest rate cannot fluctuate. This is especially important during the time it takes to file your application, process the loan and approve the loan, which could add up to a few weeks. If you don’t have a locked rate, the interest rate could increase by the time the process is complete. However, with a rate lock, it usually means that you will also not benefit if the interest rate decreases. Your mortgage lender may also require that you pay a fee to lock in your interest rate. Talk to your mortgage lender about what they offer and what rules they follow.
