Should You Lock Your Mortgage Rate?

If you’re in the market for a mortgage, it’s important to shop around for a lender (that’s why you’re here, right?). Once you’ve started the process and have the option to lock your interest rate, there are a few things to consider.

How do you know when to lock your mortgage rate?

We get it – locking your mortgage rate feels like a big commitment. And it is, but you can handle it. Once you’ve talked with your lender and have a rate you’re comfortable with, along with a monthly payment that works for you, it’s likely a good time to lock your rate.

How long can mortgage rates be locked in?

Lenders often give you the option to lock your rate for 30, 45, or 60 days. Most borrowers find that 30 to 45 days is enough, but it depends on each person’s situation. Talk with your lender about your transaction to find out what time frame makes sense for you.

What if mortgage rates drop after you lock?

Mortgage rates fluctuate, so there’s a possibility that rates could drop after you lock your rate. If that happens, you’ve got a few options:

  • Stay the course. If the rate drop is minimal, it may not be worth trying to negotiate with your lender.
  • Look for greener pastures. You do have the option to look for another lender, but you’ll forfeit money you’ve already spent on fees and costs with your current lender.
  • Float down. This option can protect you from losing out if rates drop by allowing you to “float down” to a lower rate. If you choose a float down option, pay close attention to the terms.

If you’ve got questions about your mortgage rate, call or contact us today. As your mortgage experts, we’re here to make the process easier on you.