What to Know About the Rate Lock
If your loan is locked and mortgage prices improve you don’t typically get to renegotiate. Likewise is if mortgage prices deteriorate, the bank doesn’t get to renegotiate with you. (We will cover the “float down” scenario, in which you can take advantage of a drop in interest rates in the next article).
Remember that we lock the rate with the commitment of finishing the entire loan process within that time period. If the period is set to finish without a loan, two things might happen – extend the lock or it expires. If the period expires, you face the possibility of fees, and of course you lose the rate you had locked in, thus running the risk of beginning the process again at a higher number.
Often, we will wait to lock in a rate until conditions are at their most advantageous. We watch the rates on a daily basis and make a recommendation about when to act. Make sure you work closely with your broker and stay on the page about when to lock the rate, and when you do, make sure you know the deadlines for every step of the process.
Click here to read about the floating rate lock.