Rate locks are designed to protect you from rate changes that may occur while you are house-hunting. They act as a price “ceiling”, which means that if rates rise during your rate lock period, you get to keep your lower locked-in rate. If rates drop on the other hand, then you can let go of your rate lock and take the lower rate. Either way, you get the best 🙂
Rate locks typically expire after about 120 days, although it isn’t uncommon to see 90 day rate locks as well.
Note: Remember, rate is only the price of a mortgage and does little to inform you about the features that you get for that price – like pre-payment options, portability, discounted penalties etc.
Working with a professional can make sure you don’t just have a rate lock, but that you have the rate lock at the mortgage lender that is right for you.
