There are many variables at play during a real estate purchase; so when you have the chance to control one of those factors, it can be very appealing. That may be one of the reasons most buyers choose to "lock in" their mortgage rate.

As part of your home search process, you likely examined your own finances and then researched the different loan products available. Your preparation probably included analyzing varying rates and terms and talking with mortgage brokers, lenders and your real estate professional. After all that leg work you have finally identified a mortgage provider and a product that meets your needs. The next big question is when to lock in or secure that interest rate.

By locking your rate you are guaranteed that if the percentages rise by the time of your closing, you will pay the lower rate. The idea is to lock your rate while the numbers are falling, gaining the protection before they begin to rise.

It is important to note that there may be a cost for this security, as well as associated risk. For instance, locking your rate 30 days in advance may cost you one half of a point. A point is one percent of the mortgage loan amount. So that means on a $500,000 loan locking in 30 days before would cost $2,500. This fee is paid at your closing. In addition, if you lock in your rate and the rate drops below the locked-in rate, you may be stuck with a higher rate. The value of securing a low interest rate, however, even if it’s not the lowest interest rate, gives buyers peace of mind.