It is NOT a good idea to lock in the rate until you have a signed and executed contract to give a copy to your Mortgage Broker. Here's why, Lock times vary from 12 days to 60 days. The longer the time frame, the higher the rate. Once you lock in the rate, the clock is now ticking on a time frame to close within the time frame the mortgage broker chose for you. You must give your broker and lender ample amount of time to do their work, but their work can not even start until the broker receives the contract.
If you don't close during the chosen time frame, you will be assessed a penalty charge which can cost you unnessesary dollars. So it is much wiser to get the contract signed and executed first so time doesn't eat up your loan processing term to get your loan closed.
From: Victoria Lewis(Branch Manager-Jacob Dean Mortgage)
It is usually Much Chepaer to "Lock in the Rate" after a ratified Contract. This is the Standard Rule by Most Lenders especially in the Tri-State Area. I Have Over 3 & 1 Half Years of F/T Retail Mortgage Experience. Kindly Give Me a Call. I also have Several Realtor Connections all Over especially in Alex., since this is My Territory. Although I Live in Dumfries Off U.S. Rte. 1(Jeff. Davis Hwy.), My Office is at The King Street Station in Alex., Va. across from the KING STREET SUBWAY METRO-BLUE LINE. Check Out My Trulia Profile & My Website. Kindly do Give Me a Call. My CELL is 571-521-9156. Here at Jacob Dean, We do Loans in 26 States in the USA!!! We do Residential/Commercial/Hard Money. I also Offer CONV/FHA/VA, etc. I also Have "Rapid ReScore" as well. I Have Wonderful Programs that can really Put You into that House just a little bit Faster!!! Give Me a Call. I Really Want Your Business. Take Care.
Based on the current interest rate behavior, the cost of such an option is not worth the money and stress. If you don't settle on a property prior to the lock expiring, you lose the upfron money you paid and will have to pay the current interest rate anyway. Imagine the stress of being forced to buy a house by ____ or you'd lose that money.
I just had a buyer client consider the same option with Suntrust Mortgage. Be glad to go into more detail with you offline if you'd like.