Rate locks, and the questions worth asking before you agree to one.

A rate lock is a lender's commitment to hold a quoted rate for a defined period while your loan completes, protecting you from movement between agreeing terms and closing. Locks are typically offered for thirty, forty-five or sixty days, and longer periods cost more because the lender is carrying the risk for longer. The essential thing to understand is that a lock has an expiry, and if your closing slips past it the protection ends - which is precisely when you're least able to absorb a change.

The Three Questions Nobody Asks

Three questions get asked far too rarely. What does an extension cost, and who pays it if the delay wasn't caused by you? Does the lock include a float-down, letting you take advantage if rates fall meaningfully before closing, and what does that option cost? And is the lock period realistic for this particular transaction rather than optimistic - a construction file or a complex non-QM approval doesn't belong on a thirty-day lock. Getting the period right at the outset is cheaper than extending later, and locking a term you cannot meet is a false economy that shows up at exactly the wrong moment.