Answer these Mortgage Rate Lock Questions

Are you confused by how a mortgage rate lock works? Are you wondering if this is something you should even consider?

When buying a home, you want to take as much guess work out of the process as possible. By locking your rate at the appropriate time, you can gain peace of mind in knowing that it will not increase before your closing date.

As you work with your lender, be sure to ask these five questions related to locking your rate:

•    When can a rate be locked?
•    How long can a rate be floated?
•    What does it cost to lock a rate?
•    What are the consequences if the rate lock expires before the closing?
•    What happens if mortgage rates decrease while my rate is locked?

The answers to these questions may differ from one lender to the next. For this reason, if you are considering more than one lender, make sure you always ask the same questions. You don’t want to assume that every lender takes the same approach to rate locks.

Once you answer these mortgage rate lock questions, you will have a better idea of if this is the right idea and when you should move forward.

Your lender should be able to provide you with answers to all your questions, helping you make a final decision as to whether or not this is a good idea at the present time.

Do you have any experience with rate locks? How did this go for you when purchasing your last home?