Duane Buziak Mortgage Maestro opens with an illustration, not a quote. On a $1,120,000 30-year fixed loan, a note rate of 6.50% produces principal and interest of about $7,079 a month, while 6.75% produces about $7,264. That is roughly $185 a month, or $2,220 a year, from a 0.25-point difference. A mortgage rate lock options decision comes down to matching lock length, timing and protection to your closing timeline. Because I shop your loan across multiple wholesale lenders, lock terms vary by investor, and you should confirm them in writing for your file. The rates above are hypothetical, illustrative only, not a quote.
By Duane Buziak, NMLS #1110647. A rate lock is a written commitment from the investor to hold a specific note rate and point structure for a set number of days, provided your loan stays within the terms of the lock. It protects the cost of the loan from market movement. It does not promise approval, which depends on your file.
In this article:
- 1. Lock at Contract: Match the Lock Period to Your Closing Date
- 2. Choose the Lock Length by File Complexity, Not by Habit
- 3. Lock Extension Planning: Know the Cost of Running Past Expiry
- 4. Float-Down and Re-Lock Provisions: Protection If Costs Fall
- 5. Float Before Locking: When It Makes Sense and When It Does Not
- 6. Lock Before You Have a Property: Pre-Approval and Pre-Contract Considerations
- 7. Read the Lock Confirmation: Terms, Conditions and Written Disclosure
- Ten Questions on Rate Locks for Jumbo and High-Balance Buyers
- Which Lock Decisions to Make First
1. Lock at Contract: Match the Lock Period to Your Closing Date
The lock period is the number of days the investor will honor your locked cost. The simplest strategy is to set the lock once you have a signed purchase contract, with a period that covers the contract closing date plus a buffer for ordinary delays. The mechanism is straightforward: you are paying for protection over a defined window, so the window should match the real calendar.
The jumbo math shows why the window matters. Using the hypothetical figures from the introduction, a quarter-point difference on a $1,120,000 loan moves the payment by about $185 a month. Over the first five years that is about $11,100 in payments, before any change in the balance. Illustration only, not a quote.
| Principal and interest | County property tax (assessor link) | Insurance | PMI if any | Total monthly cost |
|---|---|---|---|---|
| $7,079 at a hypothetical 6.50% | Varies by county; confirm with the county assessor | Varies by property and carrier | Depends on down payment and program | Principal and interest only; add taxes, insurance and any PMI |
| $7,264 at a hypothetical 6.75% | Varies by county; confirm with the county assessor | Varies by property and carrier | Depends on down payment and program | Principal and interest only; add taxes, insurance and any PMI |
To put it into practice:
- Send me the executed contract and the closing date.
- I confirm which lock periods are available across the wholesale lenders I compare for your file.
- Choose the period that covers the closing date plus a buffer.
- Get the lock confirmation in writing.
The common mistake is picking the shortest lock to hold down the cost of the lock itself, then running past expiry because the appraisal or title work slipped. A few extra days of coverage are usually easier to plan for than a late extension.
To measure it, track the days of cushion between the lock expiration and the scheduled closing date, and whether the loan closed inside the lock.
2. Choose the Lock Length by File Complexity, Not by Habit
A lock period that works for one buyer can be too short for another. The mechanism is underwriting time: the more items an underwriter has to verify, the more days the file needs before it can close.
Consider an illustration. A salaried buyer with two recent pay stubs, W-2s and a standard appraisal presents a simple file. A self-employed buyer with two years of business returns, a review of how the down payment funds were sourced, and a high-value property that needs a closer appraisal review has more steps, and each step can generate a follow-up condition. The second buyer typically needs more underwriting time, so a longer lock window is often the better match. Jumbo loans in particular can involve additional appraisal review or documentation conditions, depending on the investor.
To apply it:
- List your income type, asset sourcing, property type and appraisal needs.
- I flag the steps likely to run slow, such as business return analysis, large deposit explanations or a second appraisal.
- Match the lock period to that estimate.
- Confirm the available periods with the investor before you commit.
The common mistake is defaulting to a standard lock period out of habit, without accounting for appraisal review or documentation conditions that the file will actually trigger. A buyer who locked for the same number of days as a friend with a simpler file can find that the calendar does not fit.
For a measure, count the underwriting conditions still open at the halfway point of the lock period. If most remain open at that point, the schedule is at risk and you should look at an extension early.
3. Lock Extension Planning: Know the Cost of Running Past Expiry
An extension adds days to an existing lock, usually for a charge. The charge and the terms are set by the investor, so they differ across wholesale lenders. The mechanism is simple: the investor is carrying the price commitment for longer, and it prices that extra time.
Here is a hypothetical. Suppose you are buying a $1,800,000 second home, and the appraisal comes back ten days late. If the investor were to charge 0.125% of the loan amount for a short extension, then on a hypothetical $1,440,000 loan that is $1,800, added to your closing costs. Labeled hypothetical, not a quote. Extension charges, if any, are not fixed industry figures, so the only reliable number is the one in your investor’s written terms.
The practical steps:
- Ask for the investor’s extension terms at the time of lock.
- Track appraisal, title and insurance milestones weekly.
- Decide on an extension early, not on the last day.
The common mistake is treating an extension as free, or assuming the original terms carry over once the lock has expired. They may not. A lock that has expired can be repriced to current market conditions.
To measure it, review the days remaining on the lock against the number of open milestones every week. When the open milestones outnumber the remaining weeks, raise the extension question with me.
4. Float-Down and Re-Lock Provisions: Protection If Costs Fall
A float-down is an option, offered by some investors, that lets you adjust a locked cost if market costs improve before closing. A re-lock means setting a new lock after the original has expired or been cancelled. Neither is universal. Whether a float-down exists, what it costs and what triggers it depend on the investor.
Run the break-even before you elect one. Suppose a hypothetical float-down fee of $3,000 on a $1,200,000 loan, and suppose the improved cost would lower principal and interest by $90 a month. Divide $3,000 by $90 and you get about 34 months to break even. If you expect to hold the loan for ten years, that may be reasonable. If you expect to sell or refinance in two years, it is not. Labeled hypothetical, not a quote.
To evaluate it:
- Ask me which wholesale lenders offer a float-down and under what conditions.
- Get the fee and the trigger terms in writing.
- Compute the break-even in months before you elect.
The common mistake is assuming a float-down is automatic, or that a re-lock after expiry returns to the original cost. A float-down usually has to be requested within defined terms, and a re-lock generally reflects the market on the day you set it.
The measure is the break-even in months compared with how long you expect to hold the loan.
5. Float Before Locking: When It Makes Sense and When It Does Not
Floating means leaving your cost unlocked for a period after you have a contract. Costs can move in either direction, so floating is a decision about risk tolerance and timeline, not a prediction. The mechanism is asymmetric for some buyers: a move down helps, but a move up can push a file past a debt-to-income limit.
Consider an illustration. Buyer A has a long closing window and a payment cushion well inside the limits. Floating briefly may be tolerable because a move upward would not break the file. Buyer B is near a debt-to-income limit, which is the share of monthly income that goes to debt payments, including the new housing payment. A small move upward could cost Buyer B the approval, so locking immediately is the safer path.
To decide:
- Stress-test your payment at a higher hypothetical cost.
- Check the current Freddie Mac Primary Mortgage Market Survey reading, which is the weekly national benchmark, and note its as-of date.
- Set a personal lock-by date and keep to it.
The common mistake is floating with a fixed contract date and no cushion, then locking after a move upward. That turns a choice into a forced decision.
To measure it, calculate the highest monthly payment you can carry and still meet the debt-to-income and reserve requirements. Reserves are the liquid assets you hold after closing. That number is your floating limit.
6. Lock Before You Have a Property: Pre-Approval and Pre-Contract Lock Considerations
Most locks require an identified property, since the lock is tied to a specific loan amount, program and address. The mechanism is that the investor prices a defined loan, not an open-ended search. That means house hunting is the time to prepare, not to lock.
An illustration: a buyer completes a soft pull pre-approval, sets a budget, gathers documents, and then locks only after the contract is signed. A soft pull does not affect your credit score, so this preparation carries no credit cost. By the time the contract arrives, the file is ready for the lock clock to start.
To prepare:
- Start the NoTouch Credit Pull pre-approval, subject to credit approval and underwriting guidelines.
- Gather your documents.
- Ask me about the lock policy for your program, since policies differ by investor.
- Lock after contract.
The common mistake is expecting to lock during house hunting, or confusing a pre-approval with a locked cost. A pre-approval states what you may qualify for. It does not hold a cost for you.
To measure it, count the documents still outstanding on the day the contract is signed. The target is zero, because every outstanding item eats into the lock period you are about to pay for.
7. Read the Lock Confirmation: Terms, Conditions and Written Disclosure
The lock confirmation is the document that states what is actually protected. The mechanism is conditional: a lock holds only while the loan matches the terms it was set on, such as the loan amount, program, property type and occupancy. Change one of those and the investor may reprice.
For example, suppose a lock is set on a given loan amount and primary-residence occupancy. If the buyer then increases the loan amount, or the occupancy changes, the original terms no longer match and the cost may be repriced. Illustration only.
To review it:
- Request the written confirmation.
- Check the expiration date, program, loan amount, occupancy, points and credits.
- Compare each item with your Loan Estimate, the standard disclosure described by the Consumer Financial Protection Bureau.
The common mistake is assuming a lock protects against changes in credit, loan amount, property type or occupancy. It does not. It also does not promise approval.
The measure is the number of discrepancies between the lock confirmation and the Loan Estimate. The target is zero. Any mismatch is worth a call before it becomes a closing-table surprise.
Ten Questions on Rate Locks for Jumbo and High-Balance Buyers
What is a mortgage rate lock?
A rate lock is a written commitment from an investor to hold a specific note rate and points for a set period, as long as your loan terms stay the same. It protects cost from market movement but does not promise approval.
How long should a rate lock be?
Long enough to cover your closing date plus a buffer for delays. A simple file may need less time, while a self-employed or high-value property file may need more.
When can I lock my rate?
Most locks require an identified property, so they are generally set after a purchase contract is signed. Confirm the policy for your program with me.
What does a lock extension cost?
It depends on the investor and is stated in its written terms. Ask for the extension terms at the time you lock, and do not assume an extension is free.
What is a float-down option?
A float-down lets you adjust a locked cost if market costs improve, where an investor offers it. Fees and conditions vary, so compute the break-even in months first.
Does a rate lock protect me if my credit changes?
No. A lock generally holds only while credit, loan amount, property type and occupancy match the original terms. Changes can lead to repricing.
How does Duane Buziak handle lock terms across lenders?
I shop your loan across multiple wholesale lenders and compare your options, including lock periods, extension terms and float-down availability. I confirm the terms in writing for your file.
Is a pre-approval the same as a locked cost?
No. A pre-approval estimates what you may qualify for, subject to credit approval and underwriting guidelines. A lock holds a cost on a specific loan.
Can Premium Mortgages help me decide whether to float or lock?
Yes. At Premium Mortgages, Duane Buziak walks through your payment at a higher hypothetical cost, your debt-to-income position and your closing date, so the decision rests on your numbers.
What is floating a rate?
Floating means leaving your cost unlocked after you have a contract. It carries the risk that costs rise before you lock, so it suits only buyers whose budget can absorb movement.
Which Lock Decisions to Make First
Start with the two decisions that shape everything else: match your lock length to your closing timeline and your file complexity (strategies 1 and 2). Then decide on extension and float-down protection (3 and 4). Use floating or pre-contract planning only if your budget can absorb movement (5 and 6). Whatever you choose, read the written lock confirmation (7).
| Option | Who it fits | Documentation | Credit approach | Down payment and reserves as the official source states |
|---|---|---|---|---|
| Lock at contract | Buyers under contract who want certainty on cost | Executed contract and file documents | Credit reviewed in underwriting, subject to credit approval and underwriting guidelines | Confirm with the investor for your program |
| Longer lock period | Self-employed, asset-based or complex-property files | Business returns, asset sourcing, appraisal review | Credit reviewed in underwriting, subject to credit approval and underwriting guidelines | Confirm with the investor for your program |
| Float-down, where offered | Buyers who expect to hold the loan past the break-even | Written fee and trigger terms | Credit reviewed in underwriting, subject to credit approval and underwriting guidelines | Confirm with the investor for your program |
| Floating before lock | Buyers with a long window and a payment cushion | Stress-tested payment at a higher cost | Soft pull pre-approval first | Confirm with the investor for your program |
Ready to see where you stand without putting your credit score at risk? Check today’s mortgage rates with a soft-pull pre-qualification and get personalized guidance from Duane Buziak, so you can move forward on your home purchase or refinance with confidence. Call 804-212-8663 to start. Approval depends on your file and is subject to credit approval and underwriting guidelines.