which is a possibility, in between the time you and your buyer’s agent present an offer and when you close on the home. Mortgage rate locks last anywhere from 30 to 60 days, but they can also last up to 120 — and sometimes even longer. Typically, you can find a lender who will offer a rate lock for an agreed- upon length of time without a fee, but if you request an extension, there could be a charge. For example, rate locks of 30 days or less are usually free (some lenders offer free rate locks up to 45 days). Generally, though, after 45 days, the rate lock will start to cost you in incrementally higher fees, often in 30-day increments.
Step #6. Know When to Lock in a Rate
So, how do you know exactly when to lock in a mortgage rate? First, know that you can’t lock in a mortgage rate until after you’ve been approved for a loan. (Yet another reason that getting pre-approved for a loan is so important!) Also, I recommend that you decide to wait to lock in a rate until after you’ve found “the one” home (the one that meets your needs and most of your wants), and put in an offer. Further, plan for this process of waiting for the right time to lock in a loan rate to take time. For example, if you lock it in too early — you’ve found the right home — and the process takes longer than you planned for, you could easily miss out on a better rate, or end up paying more to extend the mortgage rate lock period. Remember, the longer you hold a rate lock, the more expensive it becomes. According to Bankrate.com, “a borrower who chooses a 30-day lock on a loan may pay a 4.875% rate and zero points, while a 60-day lock might cost 1 point (equal to 1% of the loan) or a slightly higher rate with a half-point.”
Yet waiting isn’t always the best route to take. What do I mean
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