What is a mortgage rate lock? Mortgage rates are constantly changing, so locking in a rate with your lender is usually a good idea. With a mortgage rate lock, your lender commits to honor a specific interest rate for a specific period of time. If market rates rise after the rate is locked, the lender will honor the lower locked-in rate. However, if rates fall after the rate is locked, the borrower probably will not be able to take advantage of the lower rate.
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A rate can’t be locked until the buyer has an accepted offer to purchase signed by the seller. There are also circumstances where your interest rate can change even though it is locked. For example:
- if the appraisal on the home comes in lower than the sale price
- if you want to make changes to the loan or down payment
- if your credit report uncovers some red flags which affect your credit score
- if your stated income cannot be verified
Normal rate locks are usually for 30 to 60 days but can be shorter or longer, and usually the longer the rate lock, the higher the interest rate will be. Always be sure to get your rate lock agreement in writing.
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One of the reasons to call the Agardi Team if you want to buy a home or have one to sell is:
Not only do we sell our clients’ homes for more money and faster than the average area agent, but your home is also more likely to sell. According to 2015 MLS statistics, only 71% of area homes sold during their listing term. Compare that to our 95% of homes listed that sold before the end of the listing term. YOUR HOME SOLD GUARANTEED OR WE’LL BUY IT*
To discuss the sale of your home, call The Agardi Team at 718-755-2882 and start packing!
*Agardi Team and the seller have to agree on the price and the closing date.