A Lock Confirmation Disclosure, sometimes called a rate lock agreement, is a binding document from your mortgage lender that guarantees the interest rate on your loan for a specific time frame—commonly 30, 45, or 60 days. This document confirms that your rate will not change during the lock period, as long as your loan application terms remain consistent.
Mortgage interest rates can fluctuate daily, making the homebuying process uncertain. Locking your rate protects you from potential increases while you complete the loan process and finalize your home purchase. The lender provides the Lock Confirmation Disclosure to detail this agreement and outline the terms clearly.
The Lock Confirmation Disclosure includes critical information such as:
- Borrower and property details: Confirm your name and the property address to ensure accuracy.
- Lender information: Identifies the lending institution responsible for the loan.
- Interest rate: Confirms the exact rate that has been locked in.
- Lock start and expiration dates: Specify when the lock begins and ends, indicating your guarantee period.
- Loan specifics: Loan amount, term length, and type (e.g., fixed-rate or adjustable-rate mortgage). Any change to these can invalidate the lock.
- Associated fees: Some lenders may charge fees for longer lock periods or optional features like a float-down (which lets you take advantage of a lower rate if market rates decrease during the lock).
If the lock period expires before closing, you risk losing the guaranteed rate and may need to accept current market rates, potentially increasing your loan costs. Lenders might offer extensions, sometimes for a fee, to avoid this situation.
Before locking your rate, ask about options such as a float-down, the length of the lock period that fits your closing timeline, and any fees related to locking. Always read your Lock Confirmation Disclosure carefully to verify all details are accurate.
For more insights on mortgage rates and related concepts, see our articles on Interest Rate Lock and Fixed-Rate vs ARM Comparison.
For authoritative guidance on rate locks, visit the Consumer Financial Protection Bureau’s page on mortgage rate locks.