When buying a rental property to hold as a long term investment most advisors suggest obtaining a long term mortgage. Rental properties provide tax deductions for investors and mortgage interest expense is just one of the benefits. But financing for the long term is still very attractive becausemortgage rate lock terms mortgage rates for rental properties can still be found most anywhere in the 4.50% range.

When you combine low rates with the increase in rents pretty much everywhere it’s an ideal situation. But rates can go up at any time and unless you lock in that rate with the lender nothing’s guaranteed. And if you purchased just a few years ago and are refinancing, it’s not time to fool with an interest rate. The only way to secure your rate is by locking it in directly with the mortgage company. They won’t lock without your permission.

There are no universal guidelines that mortgage companies are required to follow with regard to rate locks but are required to provide you, the borrower, with their lock procedures in writing for you to review, sign and return.

When locking your rate, you need to have enough lock time to close your loan with a few days to spare. The longer you need to lock, the more expensive the lock becomes. Typically for each 30 day lock period you may be asked to pay anywhere from 0.25 to 0.50%. Shorter lock terms are available with most lenders offering a minimum 10 day lock while a scant few offer a five day period. Loan papers won’t be ordered without a lock and depending upon the lender’s workload, you can expect your papers to be delivered to your settlement agent with one to three days after they’re ordered.

If interest rates float lower after you lock in your rate some lenders offer a one-time “relock” policy allowing you to get the lower rate, typically by paying  a small fee but will not give you the lower rate should you let your lock expire on purpose. In such an instance, your lender will likely relock your loan at the older, higher rate.