The Importance of Rate Locks

Rate locks were not a significant concern for borrowers due to falling rates over the past few years. Rates were at or near historic lows, and many borrowers waited to see just how low rates might go while they were in the market.

But when rates are not near historic lows, it’s good to take a closer look at important tools like rate locks to make sure you understand your options when it comes to securing a particular rate on a home loan.

After all, mortgage interest rates change daily, and sometimes several times within a day, so a rate lock helps you prepare for your loan closing knowing when your interest rate is protected against further increases.

What Is a Rate Lock?

Simply put, a rate lock on a home loan secures a particular interest rate for a specific amount of time, as long as there are no changes that impact your application.

The intention is to give you peace of mind as you timely go through the approval process that the interest rate you’re expecting to get will still be valid when your closing arises.

In other words, if interest rates happen to go up while your loan is in process, a rate lock keeps your rate at the level you agreed upon during the specified time frame the rate lock is in effect.

How Rate Locks Work

You can agree to lock your interest rate at any time in the loan process after you have submitted your application.

Rate locks range from shorter terms and may go up as long as 45 or 60 days. If you require a longer rate lock period, please contact one of our lenders to find out what specific rate lock options may be available to you based on your needs.

Also, in the event your home loan doesn’t close within the designated time frame of your rate lock, you may have the option to extend your lock for a fee. Again, speak to your lender for specifics that may apply to your specific situation.

A Smart Way to Buy a Home

Rate locks were designed to provide consumers with protection against rate increases while going through the loan application process.

Our helpful team of mortgage professionals at Gulf Coast Bank & Trust Home Loans is happy to help you get all the relevant details you need to evaluate rate locks as an option and help you to make the best decision for your particular needs.

Find one of our lenders near you and start the process today. We’ll make sure you understand all your options when it comes to today’s home loans!