A rate lock is a commitment from a lender to keep that interest rate for the borrower as long as they meet their necessary rules.Essentially the lender will hold that rate for your borrower provided that the qualifications are met. For the most part when you lock in on a rate it is only good for a certain duration. you may or may not be able to extend it depending on the lender. In the event that the rates do go down while you have the lock in place you are still locked into the rate that was locked in by you for your borrower.
If you are refinancing, be sure to ask if the mandatory 3 day right of rescission is counted in your rate lock. If not, then closing must be held at least 3 days prior the lock expiration for the rate to be honored.
Always ask for some type of written confirmation of the interest rate that you locked in at. This is your best way to see protect yourself, and ensure the broker locked the rate when you asked them to.
Some lenders will allow you to float down. What this does is allow you to you to lock in on the new lower rate in the event that rates does go down since you last locked in.
Mortgage interest rate locks are generally good for between 15 and 60 days. The longer the rate lock the higher the rate. The normal lock period is 30 days. This will give your mortgage broker the time needed to overcome any obstacles that may appear during the loan process. Always ask your mortgage broker how long the rate is locked for and get a rate lock letter to confirm.
