If you don't have it in writing, you don't have it! If you have an existing variable rate mortgage, it will specify how you lock in the rate.

If the rates are down when you lock into a fixed mortgage rate, than yes, absolutely there are savings. If the rates are high, it's typically better to go with a variable mortgage rate.

When you "lock in" a mortgage rate you are accepting the offer presented to you by the bank, mortgage lender, mortgage broker, or credit union you are working with. The lender is essentially reserving a spot for you and the money necessary to fund your loan at the agreed upon rate, assuming your mortgage application is approved.

Having a rate lock is very different from a mortgage approval. The lender still has to review your application which will likely include looking at your credit history, the value of the property, and the amount of your existing assets and other debts. The lender won't make a commitment to lend until the application is approved.

A rate lock is generally for a certain period of time, often 15, 30, 45, or 60 days. Once you lock in the rate, if you close within that window of the rate lock, your mortgage rate will not go up even if the market changes and mortgage rates increase. Talk to your mortgage representative about what will happen if your rate lock expires soon before closing due to the approval process taking longer than expected. Some lenders will offer to extend the rate lock, or share the cost of extending with the borrower. This may depend on whether the delay was due to issues on the lender's side or the borrower's.

Locking in a rate is not a binding commitment to take out the loan. Should you change your mind about purchasing a home or refinancing you may always withdraw your loan application. If rates go down after locking in it's important to remember that the lender was committed to providing you a certain rate even if rates went up during the rate lock period. With that said many lenders have policies allowing applicants in this situation to "float down" and get closer to the market rate when rates drop after they have locked in.

Wednesday.

Mortgages rates continue to hover around near record low levels and will probably remain there for at least the foreseeable future. People in the market for a new home or just a refinance of their existing mortgage likely won’t find a better opportunity to save hundreds of dollars a month in mortgage interest costs. But mortgage shoppers will be faced with a very important choice – fixed rate or adjustable rate mortgage? The differences are important because making the wrong choice could cost you a lot of money.

A fixed rate mortgage is just like it sounds. When you take out the mortgage, you lock in a rate that stays with you throughout the life of the mortgage and doesn’t change. An adjustable rate mortgage works differently. Depending upon the terms, you typically lock in a rate for a set period of time (usually one to seven years). Once that lock period expires, your rate begins to “float” meaning that your mortgage payment can go up and down every month with the movement in interest rates.

Adjustable rate mortgages typically offer slightly lower rates than fixed rate mortgages so you might be initially inclined to go for the ARM. Which way you should go may largely depend on how long you plan on hanging on to the mortgage.

If you only plan on staying in your house for three years, for example, you might find a cost savings going with the lower rate 3 year ARM and selling the house before the rate starts to float. If you plan on hanging on to your house indefinitely, the fixed rate mortgage might be the better choice since you’ll lock in a rate for the full term of the loan and remove the uncertainty of how much you’ll pay out of the equation. Plus, locking in today’s low rates would be a more cost-effective play since mortgage rates will almost certainly be higher in the coming years.

Making a wrong choice in the fixed vs. variable decision could end up costing you thousands of dollars or, worse, your home. Be sure you know how to make the right choice for your situation.