You know that interest rates change daily, right? Some who aren’t necessarily in the mortgage market may not know that if they’re not following rates every day like those with an active VA mortgage loan application in the pipeline. But they can change every day. Just contact a VA lender one week for a rate quote then call up the same lender the next week and see if the rates are exactly the same. In all likelihood they won’t be.
But whatever rates do, none of them are any good unless and until you lock in your rate with a VA lender. Until you do lock, you’re subject to the whims of the interest rate market. Yet what happens if you like today’s interest rate but you can’t close for another 30, 60 or even 90 days away? If you’re buying a brand new home and it’s still being built or the seller needs more time, how long can you lock your VA rate for, anyway?
First, the shorter the lock term, the lower the rate. Short term locks can be as little as 10 days but lenders will only lock in your loan for that short of a time frame if your loan is fully approved and waiting on your orders to lock. Lenders won’t lock in your VA rate without your permission.
The most common lock period is for 30 days and coincides with most sales contract periods. If you want to lock your rate for say 45 days, your VA lender might ask for a quarter of a point or more. On a $200,000 loan, one-quarter point equals $500. If you need to lock in for 60 days, you might expect to pay one-half point and so on.
The most common lock period for VA loans is 90 days and you can expect to pay a full point to guarantee your rate for three months. The longer the lock, the more expensive it can be, so pay close attention to your closing date and lock accordingly.