Mortgage Shopping 101: Locking In The Best Rate

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Part 4 of a 4 part series on shopping for a mortgage focuses on locking in the best mortgage rate.

The purpose of a lock is simple enough… to keep what’s valuable from disappearing. And what’s more valuable than a low interest rate on your mortgage?

New homeowner Todd Link locked in a rate of 4 and 1/2% on his loan, but almost lost that great rate when his lock nearly expired.

“My lock expired on June 29th at 5 O’clock. And we closed June 29th at 4:58. So if I would have closed 3 minutes later, I would have lost my interest rate and been back out on the open market which is now hovering around 6 percent.”
-Todd Link New Homeowner

So early on in your house and mortgage hunt, ask about a rate lock. Most lenders will give you a 30 day lock free, but a 60 day lock could cost you. Common price? One quarter of one percent.

Whether that’s money well spent depends on how long your lender thinks it will take to get the paperwork done. So ask them.

And when you start negotiating with your mortgage lender, try asking for a free longer lock as part of the package. You may be glad you did.

“Especially in an economy like this where rates are so volatile, if you’re comfortable with your rate, why not lock it?”
-Todd Link New Homeowner

Now if rates are falling or stable, locks don’t matter that much. But when rates are rising or you’re afraid they might be, get the longest lock you can and then, stay on top of that paperwork.

Stacy Johnson

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