The Pre-emptive Rate Lock - NYTimes.com Fixed mortgage rates inched upward as the federal budget deadline loomed. Now that the budget stalemate is over, however, borrowers getting ready to apply for home loans shouldn't wait around for the still-reasonable rates to drop - lock in the best rate you can get, industry experts say. The likelihood is that rates will move higher rather than lower in the coming weeks, said Keith T. Gumbinger, the vice president of HSH.com, a financial publisher. Even in "more normal" times, Mr. Gumbinger added, "we don't advise people to try to time the market. If you have a mortgage deal in place that makes your transaction work, go get it and lock it in. No one can be certain what will happen in the future. Locking in the interest rate on a loan means it cannot change, regardless of what happens to rates generally, so long as the borrower closes within the prescribed lock-in period. Most lenders won't approve a rate lock until the borrower has a property under contract or a signed offer. Before that, however, borrowers should get prequalified for a loan so they can work out issues that might affect their interest rate, said John Adam, a northeast divisional sales executive for home loans for Bank of America. For example, the borrower might need to resolve a credit problem or come up with more cash to put down. Deciding when to lock in a rate - at the beginning or later on in the loan process - is up to the borrower. But allowing the rate to float in hopes of a decline in interest rates can be risky. "Rates could go against you," Mr. Adam said. And would that put your purchase in jeopardy? Lock-in periods are typically for 30, 45 or 60 days. Bank of America's standard lock is 60 days, but borrowers should be sure to choose a period that meets their contractual obligations, Mr. Adam said. The length of time a borrower needs can vary by location. In California, a closing time of 21 to 30 days is typical in written agreements, but more time may be needed in Manhattan, "because you have condo and co-op boards that have to approve your purchase," Mr. Adam noted. Some lenders charge a fee for the lock, and longer lock periods typically cost a bit more. For example, Continental Home Loans in Melville, N.Y., asks for a point upfront to lock in for 60 days, said Michael McHugh, the company president. The amount is later credited toward the borrower's closing costs. A point is 1 percent of the loan amount. Lenders also offer, for an additional upfront fee, a "float-down" provision that allows borrowers to change their locked rate if interest rates fall. It's a way of "hedging your bet" on longer lock periods, which are more likely to see rate fluctuations, Mr. McHugh said. Borrowers considering a float-down should weigh the fee against the potential savings from a slight drop in interest rates. It makes the most sense on larger mortgages, Mr. Gumbinger said. And, he added, "if it does come true, it's like scratching off a pretty good lottery ticket." If a lock period expires before a loan closes, and the delay wasn't the bank's fault, a borrower might have to pay for an extension. Borrowers should make sure they're not delaying the processing of their loan. "Meet with the loan officer," Mr. Adam said, "make sure you know what's necessary in terms of documents, and get them in in a timely fashion."