Understanding Rate Locks: Why Longer Locks Come with Higher Costs
Understanding Rate Locks: Why Longer Locks Come with Higher Costs When you apply for a mortgage, one of the most crucial decisions you'll face is locking in your interest rate. But why do longer rate locks tend to cost more? It all comes down to risk—both for you and the lender. The Role of Interest Rate Fluctuations Between the time you apply for a loan and the moment you close, interest rates will fluctuate. Sometimes, these changes are subtle, but they can also be quite volatile, even shifting from one minute to the next. Locking in your rate serves as a safeguard against rising rates, much like purchasing an insurance policy....
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