What Are My Options for Locking in a Mortgage Interest Rate?

What Does Locking in an Interest Rate Mean?

Have you ever gone into a store, purchased something at the register, and then been told a few days later that you actually owe more money for it? We didn’t think so. That’s because once you purchase something, it’s yours at that price. This is similar to locking in a mortgage interest rate. Locking in a rate with a lender is a way to protect yourself from potential interest rate increases while you’re in the homebuying process. When you lock in a rate, the mortgage lender agrees to honor that specific rate for a certain time period, typically between 15 and 90 days.?

How Do Markets Affect Interest Rates?

Since there is no such thing as a “going interest rate”, mortgage interest rates can change daily. The U.S. and world economy both play a pivotal role in influencing mortgage rates. The health of the economy, employment, consumer sentiment, and other factors can all significantly impact rates. During periods of economic growth, rates tend to rise as the borrowing demand increases. Alternatively, in times of economic uncertainty, mortgage rates may decline.

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