Generally, two key questions should come to mind when speaking with a Loan Officer about a rate lock:
- When can I lock my rate?
- Does it cost money to lock my rate?
Rates are still at historic lows, but have become increasingly volatile with the global market challenges affecting our own stock market. It is important to be comfortable with a payment and to lock in your rate when you are able to. Who wants the unpleasant surprise that rates have increased, leading to an increase in your monthly payments. A rate lock is a commitment between you and the lender that basically puts funds on hold until the loan officer has all the paperwork necessary to close on your loan. A conventional rate lock generally lasts for 45 days. If you are refinancing a current mortgage, access to lock you rate is usually given at the time of the initial application approval. Yet if you are buying a home, this access is not granted until you have fully executed a Purchase and Sale Agreement and have signed your Intent to Proceed Disclosure.
Costs to lock your rate will vary, so a great question to ask upfront is, "How much will it cost to lock my interest rate?". Rate locks do cost money, as this is a reservation of federal funds that guarantees your loan rate. Costs can either be fixed or a percentage of the loan amount. At Ocean Communities FCU, we absorb the cost to lock your rate as long as you close your loan with us. This benefit and savings is truly appreciated by our members. If , however, you lock your rate with Ocean, but then choose to do business with and lock your rate with a new lender, Ocean will pass along the fee that it was charged for reserving the federal funds at the time of the rate lock. This fee can vary, so it is good to ask before you act.
