You signed a purchase agreement on a home that delivers next summer. The rate you were quoted is for a thirty day lock. Those two facts do not fit together, and reconciling them is one of the more consequential decisions in a new construction purchase.
The basic problem
A rate lock is a lender's commitment to honor a price for a defined period. The lender manages the risk of that commitment, and the longer the commitment, the more risk, so the more it costs. Always. There is no free long lock.
On a resale with a thirty day escrow, this barely matters. On new construction with a delivery window measured in months, and a delivery date that moves because of weather, inspections, supply and trade scheduling, it matters a great deal.
You have three structural choices.
Choice one: float, and lock later
Do not lock now. Lock when delivery is close enough that a standard lock period covers it.
What you are buying: nothing, which means you pay nothing extra now. If rates fall between now and then, you capture the improvement entirely.
What you are risking: everything. If rates rise, you close at the higher rate, and your qualifying is retested against the higher payment. That second part is the one that hurts. A buyer who qualified comfortably at one rate can fail at a rate materially higher, and now they are closing on a house they contracted for and cannot finance. That happens, and it is a very bad week.
When floating is defensible: you have substantial room in your debt-to-income ratio, meaningful reserves, and the capacity to absorb a higher payment without the approval breaking. Essentially, when you can afford to be wrong.
Choice two: an extended lock
A lock written for a long period, commonly in increments of several months out to a year or more on programs that offer it.
What it costs: a price adjustment, charged as points or a higher rate, scaling with duration. Some lenders charge an upfront fee, sometimes refundable at closing, sometimes not.
What it buys: certainty. Your rate is known, your payment is known, and your approval does not get retested against a market that moved.
The question to ask that most buyers do not: does the extended lock include a float-down? A float-down lets you take a lower rate if the market improves during the lock period, usually once, usually subject to conditions and a margin. Without one, you are protected against rates rising and locked out of rates falling, which in a market where many expect rates to decline is a real cost.
Float-down terms vary enormously between lenders, and this is one of the better reasons to have a broker shopping multiple investors rather than accepting one shelf.
Choice three: a short lock, extended as needed
Lock conventionally and pay extension fees as the delivery date slips.
Sometimes this is cheapest if delivery is genuinely near and only slips a little.
Frequently it is a trap, because extension pricing is charged at the time of extension, in market conditions you do not control. A lock extended three times in a rising market can cost more than the extended lock would have, with none of the certainty.
The questions to ask before you choose
What is the realistic delivery date, not the contract date? Ask the builder what the current average is on homes at your stage in this community. Then add time. Delivery dates in this market have been optimistic more often than pessimistic.
What does the extended lock cost, in points, for each available duration? Get it in writing.
Is there a float-down, and on what terms? How much must the market improve, how many times can you use it, is there a fee, and what is the deadline.
What happens if delivery slips past the lock expiration? Get the extension cost schedule before you commit, not when you need it.
Is the lock transferable if the loan program changes? Occasionally a file moves programs mid-process. Ask.
What happens if the appraisal comes in low? On new construction the appraisal is ordered late, sometimes close to delivery, and a value below contract price is a live possibility. See Appraisal Gaps on an Arizona Contract.
Will I be requalified before closing? Generally yes, and income, employment and credit get re-verified. Which means a job change, a new car loan or a new credit card during the build is a genuine risk to the closing, not a technicality.
How this interacts with the builder's incentive
If the builder's incentive is tied to their lender, the comparison between their offer and an outside offer has to be run on the same lock period. A thirty day quote compared against a nine month extended lock is not a comparison, and it is the most common way a builder lender quote looks better than it is.
Ask both lenders to quote the lock duration you actually need. See Builder's Lender or Your Own.
The decision framework
Tight on ratios, limited reserves: buy the extended lock. The certainty is worth more than the cost, because the downside case is not a worse payment, it is no loan.
Comfortable on ratios, strong reserves, long delivery: floating is defensible, and an extended lock with a float-down is the middle path worth pricing.
Delivery inside sixty days: a standard or modestly extended lock is usually right.
Any case: ask about the float-down. It is the single most undershopped term in new construction financing.
During the build, do not disturb your file
- No job changes if you can avoid them, and tell your lender immediately if one is coming.
- No new debt. Not a car, not furniture on credit, not a new card.
- No large unexplained deposits. See Large Deposits and NSF Items.
- Keep reserves intact. Design center upgrades paid in cash can quietly destroy the reserve position your approval depends on.
Why bring this file to us
- We raise the items that move closing dates on the first call, not in underwriting.
- Broker model. Multiple investors, which matters the moment a file stops being standard.
- The full toolkit, agency and jumbo through bank statement, asset depletion, DSCR and no-ratio non-QM.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Call before you write the offer, not after. Most of what goes wrong in escrow was decidable in week one.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit, and not legal, tax or contract advice. Contract terms and remedies are matters for your real estate broker and your attorney. Program guidelines, eligibility requirements, inspection and documentation standards vary by investor and by jurisdiction and change over time; verify current requirements for your specific transaction. Rates, terms and program guidelines change and depend on credit approval, property appraisal and other qualifying factors. Not all applicants will qualify.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
