Every borrower gets asked this and almost nobody is given the framework to answer it. The usual version of the conversation is a prediction contest about where rates are going, which is a conversation nobody is qualified to win.
Here is a better way to think about it.
What a lock actually is
A rate lock is the lender's commitment to honor a specific rate and pricing for a defined period, provided your loan closes inside it and the file does not materially change. The lender bears the risk of market movement during that window, which is why longer locks cost more. There is no free long lock.
Floating means you have not locked. Your rate is set later, at whatever the market is then.
The reason to lock that nobody mentions
Most people frame this as a payment question. Lock and your payment is certain; float and it might be better or worse. That framing misses the thing that actually matters.
Floating risks your approval, not just your payment.
Your debt-to-income ratio is calculated on the payment at the rate you close at. If rates rise materially while you float, your payment rises, your ratio rises, and if you were anywhere near the program limit, you may no longer qualify for the loan on the house you are already under contract to buy.
That is a categorically different risk from paying a bit more per month. It is the risk of being in contract, past your inspection period, with earnest money at stake and no financing.
So the first question is not where you think rates are going. It is: how much room do I have in my ratio?
- Tight on ratio, limited reserves: lock. The downside of being wrong is not a worse payment, it is no loan. Buying certainty is rational at almost any reasonable cost.
- Substantial room in your ratio and solid reserves: floating is a defensible bet, because you can absorb being wrong.
That is the framework. Everything else is secondary.
The questions to ask your lender
How long is the lock, and does it cover my closing date with room? A lock that expires three days before closing is a problem waiting to happen. On a file with known complications, well or septic documentation, condominium project review, a self-employed income analysis, build the lock long enough to absorb a delay.
What does an extension cost if we need one? Get the schedule in advance. Extensions are priced at the time you need them, in conditions you do not control.
Is there a float-down, and on what terms? This is the most undershopped feature in mortgage lending. A float-down lets you take a lower rate if the market improves during your lock, usually once, usually requiring the market to improve by some margin, sometimes for a fee.
In a market where many people expect rates to decline, a lock without a float-down means you are protected against rates rising and shut out of rates falling. That is half the protection you probably wanted. Ask. Terms vary meaningfully between investors, which is one of the better arguments for a broker shopping several rather than taking one shelf.
What makes the lock void? A change in loan amount, program, property, occupancy, credit score or income can reprice or invalidate it. Know the list.
Is there an upfront fee, and is it refundable at closing?
What voids or damages a lock, in practice
Treat your file as frozen from application to closing:
Do not open new credit. A car, a furniture account, a credit card at a store counter. Credit is typically re-pulled before closing, and a new account can change your score and your ratio, and either can reprice or break the loan.
Do not change jobs if you can avoid it. Employment is re-verified. If a change is coming, tell your lender immediately rather than hoping it goes unnoticed, because it will not.
Do not make large unexplained deposits. Everything has to be sourced. See Large Deposits and NSF Items.
Do not spend your reserves. Reserves are tested after closing. The down payment is not the only cash requirement.
Do not let the appraisal or the title work sit. A lock expiring because somebody did not order something in week one is the most avoidable version of this problem.
New construction is a different problem
Everything above assumes a resale with a defined closing date. A build delivering in six or nine months cannot be covered by a standard lock, and the choices there are extended locks, float-downs and extension schedules. Different post: see Extended Rate Locks on New Construction.
What to do if you locked and rates fell
Ask, immediately and directly. Three possibilities:
Your lock has a float-down and you use it. This is why you asked for one.
Your lender offers a renegotiation. Some will, particularly if the market moved substantially. It usually costs something.
Neither, and you refinance later. Which has its own costs, so run the comparison rather than assuming a refinance is free.
The short version
Lock when you cannot afford to be wrong, which is most buyers with a specific house and a specific closing date. Float only when you have the ratio room and the reserves to absorb a materially higher payment. And whichever you choose, ask about the float-down, because it is the one term that makes locking feel less like a bet.
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
