An agreement guaranteeing an individual a specified interest rate on a loan provided the loan is closed within a set period of time.
Ask your broker to provide you with a copy of the lock confirmation.
The most common rate lock periods are for 14, 30, 45, and 60 days. Longer rate lock periods will result in a higher rate. Rate locks can often be extended for a fee.
Always ask for confirmation of your rate lock so that you have it in writing. This can be the single most important part of your loan process since the interest rate you end up with will determine how much your monthly mortgage payment will be. You don't want to end up losing out on a great interest rate because your mortgage professional forgot to lock in your rate or because he/she gambled and lost. Rates do fluctuate on a daily basis and can go up or down within a matter of minutes. Your mortgage consultant should be able to assist you and educate you on when a good time to lock your rate will be, however just make sure that you receive confirmation after it has been done.
There are programs that you can lock in a rate for a specified period of time before you have located a property but there will either be fees involved or a higher rate. You will usually lock in your rate after you have an accepted offer to purchase a property or you when you have decided to lock in a rate on your property if it is a refinance.
Always try to lock an interest rate for a period of time within which your mortgage will close, as extending the rate lock can incur a fee.
When deciding with your mortgage consultant how long of a rate lock you should get, always make sure you allow for a grace period after closing. When refinancing you will want the rate lock to last a day or two after the rescission period ends, and for a purchase you may want to have a day or two incase for some reason the closing gets pushed back.
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