Rate-lock dos and don’ts

Securing best mortgage terms is a race against time

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

Interest rates dropped at the end of November after creeping up over the summer. As of the beginning of December, 30-year fixed-rate mortgages with interest rates below 5 percent were readily available. Mortgage interest rates change as often as two to three times in one day. Securing the lowest rate possible is every borrower's goal. However, it's impossible to time the finance market, just as it's impossible to predict exactly when the housing market will peak or slide. In this low-interest-rate environment, many buyers are locking in a rate, either when they submit their loan application and purchase contract, or some time before closing. A lock-in is a commitment from the lender to hold an interest rate for a period of time. Points (the lenders original fees) can also be locked. The length of the rate lock varies from seven days to 60 days and possibly longer. However, it's more expensive for a longer lock -- about 1/8 percent to 1/4 percent in rate or points for each ad...