What does it mean to lock an interest rate?

Interest rates are constantly changing throughout the day because markets move throughout the day. Banks and lenders can’t afford to be issuing rates to you that aren’t available to them. When you meet with your loan consultant for the first time, he or she will quote you an interest rate that is currently available. During your loan process if the markets start to deteriorate, pricing is going to get worse quickly. Your loan consultant will do the absolute best job he or she can do to lock in the rate at what they quoted you. Most of the time there is no issue and the rate you are quoted is the rate you will receive. The reason it’s smart not to lock immediately is to see if markets improve during your loan process so your loan officer can lock your rate in lower than what they quoted you, saving you more money on your payment.

At any time, to protect against uncertainty, you can ask your loan consultant to lock in your rate for an extended amount of time. Generally, rates can be locked for 15-60 days. Keep in mind if you want to have a rate guaranteed for 45-60 days, you may have to settle for a slight increase in mortgage rate. In the event the loan doesn’t get closed in the allotted lock time frame, locks can be extended for periods up to 30 days typically. Infinity Financial Group will take on the extension cost burden if it’s due to one of our banks or lenders slowing the process up.