With historically low loan rates starting to inch up borrowers should consider rate lock agreements in their home purchase and refinance activities. Locking in an interest rate freezes the terms of the loan while it’s being processed; particularly important if an increase in rates would impact your ability to qualify and/or pay for the loan.
Lenders will typically offer a rate lock agreement to borrowers with an existing purchase agreement. Most will offer a free lock for 30 days, others will charge points on the loan, occasionally refundable at close. You may also be able to lock for 45 or 60 days, but again, the lender will likely charge for this.
If you are unsure when your home purchase will close you may want to delay locking. Knowing when and how long to lock in a rate requires a clear picture of the loan process and a good estimate from your lender on how long it will take to approve your loan and complete all associated paperwork.