Category
How do I lock in my interest rate?
Answer
A “rate lock” is the term used by lenders to describe the act of setting and confirming the interest rate on your loan. The reason the rate is locked is to fix it at a specific level so that you know exactly how much your interest rate will be. Unless and until the interest rate is locked, in other words, it may continue to fluctuate. But once it is locked the lender guarantees the rate for a designated period of time – regardless of what happens to interest rates in the open market. For example, if you apply for a loan today and lock your rate now, even if interest rates continue to climb between now and the time your loan closes, the rate you locked will not rise but will remain the same. Rates can be locked in place for periods of time ranging from 15 to 90 days. Consumers are advised to get a signed and dated confirmation of the rate lock in writing from the lender, as proof of the exact rate that is promised and locked.
