When should I lock my mortgage rate?
Lock once you have an accepted offer and a realistic closing date, for a period that comfortably covers it; locks are typically available for 30, 45 or 60 days. A lock holds your rate as long as you close in time and nothing in your application changes. Nobody can reliably time the market, so the real decision is how much risk of a rise you are willing to carry.
What a lock does, and does not, protect
A rate lock is the lender's commitment to a rate and its points for a set period. It protects you from the market moving, not from your own file changing: if the loan amount, your credit score, the property or the down payment changes before closing, the pricing can change with it.
When you can lock
For a purchase, most lenders lock once there is an accepted offer on a specific property. For a refinance, you can usually lock once you have applied. Before that point a quoted rate is an estimate, and rates can move more than once in a business day.
Choosing the length
Pick a lock that covers your closing date with room to spare. A longer lock usually costs a little more, because the lender carries the risk for longer, and that cost shows up in the rate or the points. Extending a lock that runs out before closing can be expensive, so a few spare days is cheaper than an extension.
If rates fall after you lock
Once locked, you generally keep the locked rate even if the market improves. Some lenders offer a float-down, which lets you take a lower rate if the market moves far enough, usually at a cost or with conditions. It is worth asking about before you lock rather than after.
The case for waiting
Floating — waiting to lock — makes sense when your closing is a long way off, you could absorb a rise, or you are refinancing with no deadline. It is a bet that rates will fall, and the risk is that they rise instead. How rates have actually been moving is a better guide than any forecast.
Sources
We would rather you checked than took our word for it.
Related
How do I get a lower mortgage rate?
Mostly you buy it down.
Interest rate vs APR: what is the difference?
The interest rate determines your monthly principal-and-interest payment.
What happens at closing in North Carolina?
North Carolina requires a licensed attorney to conduct a residential real estate closing, which differs from the title-company closings common in other states.