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Paulette Harris' Blog

By Paulette Harris | Agent in Atlanta, GA

I am close to closing on my home, when do I Lock in my interest rate?

Because interest rates can fluctuate, it sometimes pays to lock in an attractive interest rate. A lock-in is a lender’s commitment to guarantee a specific interest rate if you purchase a home within a certain period of time.
Before committing to a lock-in, calculate your potential mortgage payments using different interest rates. If you can live with a higher payment and interest rate, you may want to avoid the lock-in, which can be complicated a
nd even costly.

Many lenders will not lock in a rate unless you have made an offer on the property. Some lenders also require the property to be appraised before committing to a lock-in.

5 Awesome Tips to Remember:

1.Talk to your lender about its conditions for locking in a rate. 

2. Ask if you will have to pay points to lock in the rate. (A point is equal to 1 percent of the amount you will be borrowing; buyers often pay points for locking in interest rate, for buying down interest rates, and part of closing costs.)

3. Find out if locking in will affect your interest rate. Some lenders may require you to pay a slight premium over a current rate to lock in their commitment.

4. Ask your lender how long the lock-in is good for. Typically, a lock-in will require that the purchase, be finalized, or closed, within a preset time period.

5. Tell your lender when you’re ready to lock in a rate.

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