Lock-in Your interest rate ASAP!
This agreement between a borrower and a lender allows the borrower to lock in the interest rate on a mortgage for a specified time period at the prevailing market interest rate. A loan lock provides the borrower with protection against a rise in interest rates during the lock period. Depending on the lender, you can lock-in at the time of application, during loan processing, at the time of loan approval, or later.
A lock-in holds an interest rate and points for a specified period of time, usually 30-60 days. A lock-in at application is useful when interest rates are on the rise, protecting against rate increases. If interest rates are falling, it may be best to wait until after application approval to lock-in.
Lock-ins aren’t always free. Some lenders charge up-front fees, which may or may not be refunded upon application withdrawal or denial. Other lenders charge the fee at settlement. The fee may be a flat fee, a percentage of the mortgage amount, or a fraction of a point added to the Lock-in rate.
If you lock in a mortgage rate, you're committed to a “worst-case” scenario. As in, if your loan fails to close before your rate lock expires, and rates have gone up, you'll pay the higher rate. ... If rates have not changed or have fallen a bit, your lender should let you re-lock at no additional charge.