What is an Interest Rate Lock

A Lock-in or Rate Lock on a mortgage means that your Interest Rate will not change between the offer and closing, as long as your loan is closed within a specified time and there are no changes in your mortgage application

Mortgage rates can fluctuate daily and sometimes hourly. Rate locks are typically available for 30, 45 and 60 days and sometimes longer. If your rate is not locked, it can change at any time. 

There is also a down side to a rate lock. If your transaction needs more time, it may be expensive to extend it. If rates fall after you receive your loan offer, it may lock you out of a lower rate. 

Page 1 of your Loan Estimate shows you whether or not your Interest rate is locked and for how long. Some lenders may not lock your interest rate. 

If there are changes to your application, Income Amount, Credit score or verified Income, your Interest rate can still change despite the Rate Lock. 

Some of the common reasons your Interest rate might change despite a rate lock:

(a) Change in Type of Loan          (b) Appraisal on the House comes in too high or too low          (c) Change in your Credit score          (d) Change in Verified Income

It is recommended that a Rate Lock Agreement is long enough to cover the time till Closing. 

Related Topics:        The Loan Estimate (LE)           The Closing Disclsoure (CD)                 Good Faith Estimate (GFE)                Uniform Residential Loan Application                 What is a Credit Check                What is a Credit Score                What is an Appraisal              


Apply Online       Check Loan Status      Upload Documents    Call Us: (214)699-4790

Back to Consumer Mortgage FAQ's