Locking Your Loan
Locking the rate of your loan can feel like a game, a very intimidating game. Here’s what it means and how to make it work for you and your financial situation.
Locking your loan is also referred to as a rate lock. Essentially, a rate lock is a guarantee from a mortgage lender that they will give an applicant a certain rate on their loan, for a specified period of time, provided the loan closes within the lock period. Borrowers will have the option of choosing between 21, 30, 45 or 60-day lock which varies by price. Working with their Loan Originator, they will help direct what lock period works best for your financial situation.
So what’s the big deal? Once your rate is locked, there is no moving it. If you lock your rate on Tuesday and by Thursday rates have dipped lower, you will not be able to benefit from these lower rates since you have already locked in. However, if rates increase, the mortgage lender is not allowed to apply this new rate to a loan application that has already locked in a lower rate.
In order to ensure you lock at the best time for your situation, keep in touch with your Realtor and trusted mortgage professional. Their insight into the market paired with monitoring rates daily will give you the information you need to make the decision that is right for you. Locking a loan can seem like a gamble but communicating with your mortgage team can help ensure you get the best deal possible.
Take the guesswork out of this step by maintaining an open conversation with your mortgage professional during the process. Doing this will allow you to lock your loan at an opportune time. Contact a mortgage professional in today to navigate the process.