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Refinance: Lock Your Rates

The commonly asked question is, when should the rate be locked? 

This generally is based on each individual loan and the rates available on the market.  Rates tend to fluctuate and it is a collaboration between the borrower and the lender to “lock” or allow for “floating.” This is the decided risk for holding out for a lower rate, rather than locking in the rate that is presently being offered.

What are the pros and cons of locking the rate?

When the rate is locked, it provides you with a certain amount of time to complete any transactions regarding your loan.  It offers a sense of security knowing that the interest that you will have on you loan will not increase if the rates rise during the time it takes to complete transactions.  The disadvantages of locking are that during the time your loan is locked if the rates fall you will not be able to lower your rate.

What are the pros and cons of waiting to lock the rate?

For starters, waiting provides you with the chance to possibly get a rate that is lower than the one presently being offered.  A lower rates means that in the end you pay less.  However, this is a risk due to the fact that rates change every day.  They may rise and not drop back to the original rate that was being offered.

In conclusion, whether you lock or float, the lender will be there every step of the way consulting you on the best time they believe you should lock.


Mortgage World Bankers, Inc.
(NMLS Company ID# 7116, in New York holds a Mortgage Banker License (# B500764) and Mortgage Banker Branch Licenses for Astoria, NY (NMLS ID 558838), (NMLS ID 1081208) and for Flushing, NY (NMLS ID 64452) Branch Offices approved by the New York Department of Financial Services, Phone(212)709-3500; in New Jersey holds a Residential Mortgage Lender License (#9947218) and a Residential Mortgage Lender Branch License for Englewood Cliffs, NJ Branch Office (NMLS ID 336925) approved by the New Jersey Department of Banking and Insurance, Phone: (609)292-7272; in Connecticut holds a Mortgage Lender License (# 12674) approved by the Connecticut Department of Banking, Phone: (860)240-8140; in Florida holds a Mortgage Lender License (# MLD638) approved by the Florida Office of Financial Regulation, Phone: (850)410-9895; and in Pennsylvania holds a Mortgage Lender License (# 29750) approved by the Pennsylvania Department of Banking and Securities, Phone: (717)787-2665.