When you "lock in" a certain interest rate for your mortgage loan, you are guaranteed that rate provided the loan is completed and closed within the time period the lock has been set for. At Applied Wholesale Mortgage the rates we quote are based on a 30-day lock which means that from the time the rate is locked, the application, submission, approval and closing must be completed within 30 days. It is possible and not uncommon to lock your rate before your loan is approved and even before your loan is submitted.

Borrowers can choose a lock period of 15-, 30- or 45- days. In general, the longer the lock period, the more points must be paid. Additionally, the cost for extended locks often fluctuate with the rise and fall of the market.

30-day lock periods are the most common. A 15-day lock will cost 0.125 points less than a 30-day lock. Likewise, a 45-day lock period will cost 0.125 points more than a 30-day lock. Although a 15-day lock period may cost less than a 30-day lock period, it is very difficult to complete all the steps necessary for loan approval within 15 days. If any unforeseen delays should appear, the borrower runs the risk of losing the guaranteed rate and may actually end up with a higher rate for which they may not qualify.

In the event there is more than one person signing for the loan, it is very important for both borrowers to discuss the lock expiration date and to be available to sign all necessary documents. Should one borrower be out of town, a "specific power of attorney" should be prepared so that the other person may sign for both.