Should you lock in the mortgage rate?

Q: Is it smart to lock in the mortgage rate?

A: The interest rate market is constantly fluctuating and often experiences quick, unexpected movements. Locking in a mortgage rate with a lender can offer protection from the time your lock is confirmed to the day it expires.

Lock-ins are logical in a rapidly-rising rate environment or when borrowers anticipate rates climbing during the next 30-60 days, which is usually the amount of time a lock-in remains in effect.

A lock-in given at the time of application is useful because it may take the lender several weeks to prepare a loan application. But these days ,automated loan practices have sliced the time significantly.

Lock-ins aren’t necessarily free. Some lenders require you to pay a lock-in fee to guarantee both the rate and terms.

If your lock-in expires before you close on the loan, most lenders will base the loan rate on current market interest rates and points. 

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