What are the advantages of having a rate locked loan?

Asked by Clairesmom, Chicago Heights, IL Mon Feb 11, 2013

Help the community by answering this question:

+ web reference
Web reference:


PollyAnna Sn…, Agent, Bozeman, MT
Mon Feb 11, 2013
Hi Clairesmom - Both Jacques & Mitchell are correct in their answers and are tlking to different subjects 1) rate locked as in the rate of the loan over time and 2) rate locked as in during your contract/escrow period. I take the question as you "locking in your rate" during the escrow/contract period and since we've seen slight movements up over the past few days, that may very well be a good idea AND it will "lock" the rate you had at the time of lock or purchase (usually good for a given time period - short, albeit - once locked and without paying a cost).

Advantage = rate cannot go higher than the locked amount between lock date and closing date. You are stuck (unless buying out of the lock) if it goes lower though. Get your good luck charm and hit the tables, girl!

Hope this helps - cheers!
1 vote
Mitchell Fel…, Agent, Brooklyn, NY
Mon Feb 11, 2013
Dear Clairesmom,

If you lock in your rate, you do not have to worry about getting a different rate at the closing table other than that which you were quoted/locked in at. If you do not lock in, the actual rate will be set shortly before your closing and can be somewhat different than the original quote depending on what the mortgage market is doing at that particular time.

You see, rates fluctuate day to day. If you want to be guaranteed a rate, you need to lock in. If you are willing to take your chances, your actual rate can go up or down depending on the market at the time that you close or choose to lock in at a later date if need be.

What you should do depends on your tolerance of risk, are you a gambler? Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
2 votes
Jacques Ambr…, Agent, Forest Hills, NY
Mon Feb 11, 2013
If you consider that interest rates are at historically low percentages, and if you plan on remaining in your property for a long period 5+years then having a fixed rate loan would probably serve you well. A lot depends also on what the alternative loans are being offered. Speak to a mortgage professional
1 vote
The Stephen…, Agent, Portland, OR
Mon Feb 11, 2013
There are none if interest rates are going down, but if interest rates are rising, this will "lock" you in so you can enjoy the lower rate being offered right now.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more