Eugene Mortgage News

What is a rate lock?

December 29th, 2017 4:08 PM by Mike Herborn

A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest
rate for you for a certain period during your application process. This ensures that your interest rate will not rise as you are going through the application process. This protects you from the rates going higher.

 

When should you lock in?

If you think that interest rates may go up, this would be the time you want to lock. But if you think they will lower, then you may choose to not lock and carry on.

It is always good to consult your mortgage consultant for their opinion on what the market is doing. 

What about when rates rise?

When you lock a rate and the rates rise, this is when it feels worth it. You are locked in at a lower rate and are protected.

Rates are constantly moving every day. There are so many different factors that can have an impact on what the rates will do. It is always less stressful to lock your loan early in the process that way you know exactly what your rate and payment are going to be. 


What about when rates lower?

It is possible if you are already locked in that rates could drop. If rates have dropped significantly and we are at the end of the process cleared to close, we may be able to lower your rate based on the new market conditions. 

Posted in:General
Posted by Mike Herborn on December 29th, 2017 4:08 PM