Buying a home or refinancing a mortgage usually takes a while. From the time you start to when you close, interest rates can fluctuate. Those changes can add up to thousands of dollars, and might even mean you need a bigger down payment to meet lending requirements. A rate locks protects you from rising interest rates and protects your home buying power.
A mortgage rate lock is an agreement between you and a lender on a certain interest rate for a specific period of time.* Most lenders offer rate locks that are good for between 30 and 90 days. As long as you close within that period of time, you’re guaranteed that rate. Policies vary from lender to lender on whether you can extend your lock and fees you may pay.
Mortgage rate lock agreements should be made in writing so you can verify what you’re agreeing to. You’ll want to confirm the interest rate, number of days the rate lock is good for, and any terms, conditions and fees.
Rate lock agreements are specific to your credit situation, property appraisal, and other loan factors. Any change to those things before your closing date could affect your interest rate.
Some lenders let you take advantage of falling rates when you’re already locked. This is called a float-down option, and provides extra peace of mind. Typically a float-downs can only be exercised once, and terms vary across lenders.
If a lender doesn’t have a float-down option, they may instead offer a lock break option for a fee. Or they may also be willing to negotiate with you on a lower rate than what you agreed upon.
Many lenders, including Affinity Plus, require a signed purchase agreement before you can lock your rate. When you lock your rate with us, which you can do with no charge, the rate lock is good for 60 days.
Talk to your loan officer about your expected closing time-frame. Choose a rate lock length with some buffer time to ensure that you'll close within the rate lock period. Generally the longer you have until you close, the longer you can wait to lock your rate. Over a longer period of time, there’s more of a likelihood that rates will go down.
No one can tell you with much certainty what home loan interest rates will be doing. Once you’re approved (or pre-approved), your mortgage loan officer can help guide you on the best timing for locking your rate. When you’re comfortable with your loan offer and are happy with the current rates, that’s the time to consider locking it in!
1. Apply for a mortgage.
2. Get approved or pre-approved.
3. Talk to your mortgage loan officer about their rate lock programs. Your mortgage loan officer will tell you about the available rate lock programs and all the specific terms and conditions.
4. Let them know when you like to lock your rate! And if you aren't sure, they'll help you decide.
5. Sign your rate lock agreement. This will have all the terms of your lender's rate lock program.
* A rate lock is not a loan approval; a loan approval will come from Affinity Plus once the underwriter has reviewed all of the required documentation.
All rates are subject to loan level pricing adjustments based on individual loan attributes and are subject to change if those loan attributes change from when the loan was locked. Other terms and fees may apply.