Ready to Lock in Your Mortgage Rate? Not So Fast!

If you’re in the middle of buying a home, there’s a good chance you’ve already heard about “locking in your interest rate.” With rates fluctuating day to day, locking your rate might seem like a no-brainer, a little relief in an otherwise stressful process. But before you jump in and freeze that rate, let’s talk!

As real estate attorneys working in New York, we see it all: delayed closings, unexpected paperwork issues, the works. Here’s something we can’t stress enough DO NOT LOCK IN YOUR MORTGAGE INTEREST RATE WITHOUT TALKING TO YOUR ATTORNEY FIRST! It could save you a whole lot of hassle (and money).

Why the Rush to Lock?

Mortgage rate locks come with an expiration date. If your closing isn’t scheduled by then, you’ll either pay a hefty penalty or pay for an extension. In New York, closing dates are famously unpredictable. Why? Because there’s a whole checklist of things that need to happen first:

• The contract needs signatures from both the buyer and seller.

• Your lender has to review everything yep, all your financials and the contract itself for loan approval.

• A title search has to be ordered (those can take 3-6 weeks, depending on the local town’s speed and whether any issues pop up).

• Sometimes, a survey of the property is required.

• Condo or co-op buyer? Board approval and management paperwork need to be sorted out.

• If the place is supposed to be delivered vacant, all tenants need to be out, no exceptions.

Until ALL these boxes are checked, the closing date is still up in the air.

Our Pro Tip

Before you lock your rate, check with us! We’ll review your file and see how close everything is to being wrapped up. That way, you’ll avoid last-minute scrambling, and those nasty penalties that pop up if your rate lock expires.

Sadly, we’ve seen buyers lock their rates on their own, thinking it would speed things up, only to be hit with expensive penalties or a giant headache as everyone rushes to make the deadline. Let us help you save the stress!

Thinking of buying a home or in the middle of one now? Have questions about your rate lock or closing process? Reach out we’re always here to smooth the way for you.

About the Author

Leslie has been practicing law since 2009 and is the host of the estate planning podcast 'Legacy Purse'. She has a long history of representing family members struggling to inherit property and/or wealth from deceased family members through the Probate Courts. Knowing how time-consuming and expensive the probate process is, Leslie takes great pride in helping her clients learn how to plan and protect their families during their lives so they can avoid the probate court process and save their loved ones that additional grief (and expense).