If you’re ready to apply for a mortgage loan, the odds are you’re following the ups and downs of mortgage interest rates carefully. This isn’t surprising as a higher interest rate will make your monthly payment higher while a lower one can save you a significant amount each month.

What is a mortgage rate lock?

In a rate lock, your mortgage lender agrees to hold the current interest rate for which you’d qualify for a specific number of days. Your lender might agree to hold an interest rate on your 30-year fixed-rate mortgage for 15, 30, or 45 days.

When should you lock in a mortgage rate?

Locking your rate makes sense when you like your interest rate and feel that it is a fair one. If you don’t lock, your rate might raise before you complete the loan application process. But remember that average interest rates might fall after you lock in your rate. That is a risk that you take.

What is involved in a rate lock?

Locking a rate is not always free. If you have to pay for the service, be sure to ask before you lock. What you pay varies depending on your lender and how long you want to lock in that interest rate.

If you’re debating whether a rate lock makes sense for you, talk to your lender. Don’t have a lender? We’d be happy to give you recommendations for local mortgage professionals. Feel free to contact us at 407-212-2301.