A rate lock-in is an agreement from a mortgage lender to hold a specific mortgage interest rate for a specific time period. Think of it as insurance that you'll get your loan at the agreed-upon rate, even if rates rise.
There are typically four elements to a rate lock. They should be clearly shown on the confirmation you receive after you have notified the lender you wish to lock in your rate.
- Interest rate – your rate depends on the market conditions on the date you choose to lock your rate
- Points – funds paid to get a lower interest rate
- Lock period – how long the agreement will be valid
- Loan product – what type of mortgage the agreement applies to
When to lock in your rate
Deciding when to lock in involves some guesswork. No one can predict future interest rates with certainty. At Virginia Credit Union you can lock in a rate at any time during the mortgage application process:
- When we receive your application
- During processing of the loan
- When the loan is approved
- Up to three business days prior to your loan closing
If you are risk averse, you may want to lock in your interest rate early. If you can tolerate a rise in interest rates but would be happy with a lower rate than the current market interest rate, you may be a candidate to “float with the market.”
Locking in your interest rate
After we receive your completed application and appraisal lock in fee, you may give us your written lock-in request between 10 a.m. and 4 p.m. on any business day. For purchase transactions we will need the fully executed sales contract.
There are three ways to submit your lock-in request:
Your request should include the specific rate and points available that day which you wish to lock in and it must be signed and dated by you or a co-applicant. Please call Member Services at (804) 323-6800 or (800) 285-6609 to get current rate quotes.
We will send a confirmation letter within 5 business days of receiving your lock-in request to let you know that we received and accept your request. This letter is not a commitment to make the loan or to close your loan by a specific date.
If you have any questions about locking in an interest rate, please contact Member Services at (804) 323-6800 or (800) 285-6609.
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