Locking in your interest rate means securing it for a set amount of time, known as the “rate lock period.” Because mortgage rates can move quickly, locking your rate can help protect you from potential interest rate increases that could happen before you close on your home.
How long can you lock in a mortgage rate for?
Rate locks can help protect you from rising interest rates, but they do expire. While timeframes vary, typical rate lock periods last between 15–60 days. If your rate lock expires before closing, you may be able to pay a fee to extend it. Otherwise, your rate will reset to the interest rate that’s available when you lock again before closing.
It’s also worth noting that a rate lock can become void if there are changes to your Loan Application or financial situation. Because your rate is based on factors like income and credit, any shifts—such as opening a new credit line that affects your debt-to-income ratio (DTI) or credit score—may require your lender to reevaluate your loan eligibility and interest rate.
Do I have to lock my interest rate?
You can keep your rate “floating” until roughly two weeks before closing, which means your rate can rise or fall with the market until you choose to lock it. Although floating can be beneficial if rates appear to be dropping, it does make you more susceptible to risk because rates can fluctuate at any time. Checking recent rate trends can help you decide when to lock in at a potential monthly payment amount that feels right for you.
What if my home’s construction takes longer than the rate lock period?
For new construction homes, it may take months before your home’s build is finished and it’s time to close. In that situation, your lender may offer an extended rate lock for 180, 270, or 300 days. Additional fees may be required at the time of your rate lock, but they may be refundable if the loan is closed pursuant to the terms and conditions.
Since it’s difficult to predict where rates will be months in advance, it’s best to work with your Loan Consultant to review current rates, market trends, and your budget. Together, you can decide when locking in your mortgage rate makes the most sense for your unique goals and financial situation.
For questions related to rate locks, be sure to reach out to your Pulte Mortgage Loan Consultant. They’re available to help!
