How to Lock Your Mortgage Rate: What to Ask Before You Do
This article is general information about New York real estate practice, not legal advice. Fees, forms and procedures change, so confirm with the office involved and with your attorney before you act.
A mortgage rate that looks good on Tuesday can be another number by Friday. Lenders reprice as the market moves, sometimes more than once in a day, and closing on a house takes weeks.
A rate lock is the tool that stops the drift. It is not complicated, but it comes with conditions that surprise people at the worst possible moment.
What a lock actually does
The Consumer Financial Protection Bureau explains that a rate lock means your interest rate stays the same from the loan offer until closing, as long as you close within the time frame the lender specifies and your application does not change. Without a lock, the rate can change at any time.
Lock periods are typically 30, 45 or 60 days, sometimes longer. Pick one that comfortably covers the gap between your signed contract and the closing date on your calendar, because the lock is only useful if it is still in force on the day you sign.
Check your Loan Estimate first
The Loan Estimate your lender sends shows whether your rate is locked and for how long, usually at the top of page one. That tells you the status. According to the CFPB, it does not show what it costs to extend the lock, what a longer or shorter period would cost, or whether a different time frame would be cheaper. You have to ask for those figures directly.
Ask these questions before you lock
- What does it mean if I lock my rate today?
- What lock time frame does this Loan Estimate provide?
- Is a shorter or longer lock available, and at what cost?
- What happens if my closing is delayed and the lock expires?
- Under what conditions could my rate still change after I lock?
- What happens if rates go down after I lock?
Those six come straight from the CFPB’s consumer guidance, and they are the right order. Write the answers down, with the date and the name of the person who gave them, so there is a record if anything is disputed later.
What can still change your rate
A lock is a promise about the market, not about you. The CFPB lists examples of changes that can still move your rate: switching the loan type or the down payment amount, an appraisal that comes in higher or lower than expected, a change in your credit score from a new loan or a missed payment, and income your lender cannot document, such as overtime or bonuses.
The practical rule is to freeze your financial life once you lock. No new credit cards, no car loan, no moving money around without a paper trail, and no switching jobs without telling your loan officer first.
Know the trade-offs
Locking protects you against a rise and costs you any benefit if rates fall. The CFPB notes that if rates drop after you lock, you may not get the lower rate. Some lenders offer a way to adjust, and some charge for it, so ask before you commit.
Extending a lock can also be expensive when closing slips. Delays are common in New York, where attorney review, title work and a co-op board or condo package can all add days. Ask what an extension costs per day or per week before you need one, not after.
A simple way to decide
Lock when the rate and payment work for your budget and you have a signed contract with a realistic closing date. Choose a period with a cushion, but not so long that you pay for time you will not use. Keep your lender, your attorney and your agent on the same calendar.
Mortgage terms vary by lender and by loan, so treat this as a framework for the conversation, not a quote. Your loan officer can tell you exactly how your lock works.
