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When homebuyers lock in at a specific mortgage rate, the lender only guarantees the interest rate and points for a specified time period – generally 30, 45, or 60 days. It is important for borrowers to get the lock-in contract in writing, as a verbal agreement will not stand. The lock-in letter should indicate that the lender is guaranteeing the rate, the fee structure, and the deadline for loan funding at the locked rate.

Just months ago, sources say, borrowers were able to lock in a rate once their loan application and credit report were received by the broker, with a promise to provide W2s, payroll stubs, and bank statements within 48 hours. The current backlog, however, has prompted brokers and lenders to also require proof of an appraisal order before they will agree to lock in a rate.

Though longer lock periods are more costly, they help ensure the loan's funding by the deadline. Otherwise, only an exception will get the borrower the locked rate.

Borrowers generally pay fees and higher interest rates to lock in, and these terms should be specified in the contract. However, reputable lenders do not require any money upfront.

Finally, it is essential for borrowers to understand beforehand what will happen if the loan is not funded by the lock-in deadline.

"Would-Be Home Buyers Can Get Locked Out," Orange County Register (12/28/01); McCabe, Diana.

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