Explaining Mortgage Rate Lock

Hi Kate, My wife and I are trying to refinance. Our lender asked us if we wanted to lock in our rate. I don't understand what this means.

Can you explain the process? The Mackeys

Dear Mackeys, Locking mortgage rates has to be one of the most confusing moments during a refinance. I sympathize. It isn't like refinancing comes with an owner's manual.

First of all what does locking in a mortgage rate mean? It is the process of determining your final interest rate.

Here's an example. If interest rates are 6% today, by locking you have guaranteed the amount of your future monthly house payments, even if interest rates increase during the refinance process. You will have saved, or in other words locked in, 6% for the life of your new loan.

Tip: Mortgage rate locks should be accompanied by a written agreement.

I hear often from Readers for help with mortgage rate lock problems. And this is the exact reason I say you must ask for a mortgage rate lock agreement in writing.

For more ways to protect your mortgage rate lock, don't miss Nitty Gritty Mortgage Rate Lock Agreements because after all, it is your home and your mortgage!




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