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More Information
Second Mortgage
Why Take Out a Second Mortgage?
Traditional Second Mortgage
Home Equity Line of Credit (HELOC)
Preparing Your Credit
Preparing to Apply
Understanding Fixed Rates
Understanding Adjustable Rates
Shopping for a Lender
Locking in a Rate
Understanding Points
High-Interest Debt: A Way Out
Paying for College
Home Renovation
Using the Internet to Research
Payment Comparison
An Affordable Monthly Payment
Private Mortgage Insurance
HELOCs and Monthly Payments
The Role of the Loan Officer

Locking in a Favorable Rate

Now more than ever, the behavior of our country’s volatile financial markets is hard to predict. For consumers looking to finance a second home mortgage loan, being quoted a good interest rate is only half the battle. You need to be sure that the rate that you were promised at the beginning of the mortgage loan process is the one you actually end up with once the loan closes.

Once you have decided on which lending institution will finance your second mortgage loan and have begun the application process, talk with your loan officer about when and how you can “lock in” the interest rate on your loan.

Depending on the institution’s particular policy, you may be able to lock in your rate as soon as the application is filed. Other lenders may not allow you to do so until the mortgage loan has been processed or after it is approved.

Remember, any promise to lock in a rate should come in writing. Though a verbal assurance is usually made in good faith, it is far easier to prove the authenticity of a written agreement. You may want to show the written agreement to a real estate agent or lawyer to make sure it is valid.

While locking in your rate is often a good move, especially if interest rates are on an upward trend, do not rush to do so without consideration first. Find out if your lender charges a fee for this service, and what happens to the fee if the loan fails to close. Also ask your loan officer what will happen if rates go down during the period covered by your lock in period.