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What Is A Rate Lock? Your Shield Against Rising Interest Rates
Looking for ways to save money on your mortgage? A rate lock can help. This tool protects you from market changes while you finalize your home purchase.
Rate Locks Made Simple
A rate lock freezes your interest rate for a specific time period. Your lender guarantees this rate while they process your application. Most locks last between 30 and 120 days. This means market rates can go up, but your rate stays the same.
Why You Need a Rate Lock
Rates change daily based on many factors. The economy shifts. Markets fluctuate. Government policies update. Without a lock, your initial rate quote might increase before closing day.
Let’s look at real numbers. Take a $500,000 mortgage. A mere 0.5% rate increase adds $140 to your monthly payment. Over 30 years, that’s $50,000 more from your pocket.
Key Things to Know
Before you lock your rate:
- Check how long locks last ( 90 or 120 days are common)
- Ask about fees for longer locks
- Plan for closing within your lock period
- Look for “float-down” options if rates drop later
Best Time to Lock
Smart timing helps you secure the best rate. Consider locking when:
- You have an accepted offer on a home
- Rates sit at low levels
- Experts predict rate increases
- You know your exact closing date
I can help you decide when to lock your rate. We’ll create a plan that fits your home buying journey.
Want to learn more about rate locks? Have other mortgage questions? Contact us today!
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