rate lock.
Peace of mind during settlement process. Sometimes rates are rising rapidly, a rate lock allows you to lock it in Eddie.
what is rate lock?
A rate lock enables you to secure a fixed interest rate on your home loan when you apply, protecting you from potential interest rate increases before your loan closes This offers reassurance throughout the settlement process.
what does rate lock cost?
Rate lock fees vary by lender, but they are generally a flat fee between $395-$750 or a percentage of the loan amount 0.15 - 0.25%. This fee is usually not refundable even if the loan does not proceed.
what happens after rate lock period?
The rate lock typically lasts for 60 to 90 days, depending on the lender. If your loan does not settle in that timeframe, you may miss the oppurtunity to secure the current fixed rate at settlement. Additionally, if permitted, you might need to reapply for the rate lock, this could require another fee.
pros & cons
-Safeguarding interest rate increases from approval to settlement
-Financial predictability with a fixed repayment amount
-Assurance during periods of fluctuating rates
-Additional initial costs, which can be considerable for larger loans
-No advantage if interest rates decrease before settlement
-Non-refundable, even if you decide not to move forward