Some lenders extend mortgage rate lock periods during coronavirus - Business Insider

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.As mortgage rates fluctuate quickly and closing times take longer than usual amid COVID-19, some lenders are offering extended rate lock periods at no extra cost.Locking in your rate can save you money should rates increase before you close on your home.If you're buying or refinancing a home, ask your lender whether it will extend the rate lock period.Read more personal finance coverage »If you're trying to buy a home during the coronavirus pandemic, the experience is probably more stressful than you'd anticipated before the outbreak began.Two major obstacles have arisen for homebuyers: Mortgage rates are fluctuating quickly, and closing times are taking longer than usual as lenders deal with the complications that come with social distancing.Thankfully, some lenders are providing a solution by extending mortgage rate lock periods. This way, you can snag a good rate and keep it even if your lender takes longer than usual to process your loan.Some lenders are offering extensions for all mortgages, while others are limiting the offer to refinanced home loans. Ask your lender about how the coronavirus has affected its policy.How do rate lock periods typically work？Coronavirus aside, mortgage rates fluctuate from day to day. From the time you're approved for a loan, you can request to lock in the rate — this way, if the rate increases before you close on the home, you still pay the rate you previously agreed upon with your lender.Rate locks are optional, and they do come with risks. It's possible you'll lose out on a better rate if you lock one in before rates decrease.However, rate locks can help you secure a good rate before rates go up, which could save you thousands over the term of your loan. Locking in a competitive rate is generally seen as a good move.Every lender handles rate locks differently. Some allow you to freeze your rate for free, while others charge a fee. Your lender may offer rate locks for 30 or 60 days, or it might allow longer lock periods.What if it doesn't look like you'll close on the home before your rate lock period ends？ Under normal circumstances, you could extend your rate lock period, but you'd pay extra. The process could look a little different during the coronavirus outbreak, though.Your lender may extend your rate lock period during the coronavirus pandemicSome lenders are extending borrowers' rate lock periods at no extra cost. In a time when so much is uncertain for people buying or refinancing homes, this move can provide you with some security.Not all lenders are offering extended rate lock periods. The ones that are providing extensions all have different policies.For example, Navy Federal Credit Union promises that once you lock in your mortgage rate, it will stay locked in until you close on your home, no matter how long the process takes. Bank of America told Business Insider that it is extending rate lock periods for borrowers who are refinancing their mortgages. The bank's extensions usually last for 60 days, but it's lengthened the period to 90 days.Ask lenders about their rate lock policiesIf you're in the process of buying or refinancing a home, ask your lender whether it's extending the rate lock period. Lenders may not advertise this information, so be sure to ask outright.Remember that not all lenders are providing rate lock extensions to assist with the coronavirus. If the ability to lock down a rate during this difficult time is a priority for you, a company's policy could help you determine which lender to use. Read more on managing your money in this tumultuous time:3 options for people struggling to pay their mortgage during the global health crisis4 reasons to get disability insurance, even if you don't think you need it If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 billsHow to get a stimulus check from the US government, which could pay up to $1,200 if you qualifyIn response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more