Rates appear to be making a long haul higher although a gradual one. This in light of the Fed’s pronounced determination to put to an end the questionably successful QEIII in late October along with recent economic reports showing signs of strength in multiple areas with a fresh new coat of consumerlong term locks confidence. At least, that’s the expectations of most investors and while it’s certainly possible rates could stay where they are now or even move lower, the likelihood of that happening is less so compared to higher rates.

So what if you’re in the middle of looking at a prospective purchase and higher rates will definitely impact cash flow. Should you lock in your rate now to preserve your cash flow goals?

That depends on how far along you are in the evaluation process. If you haven’t even made an offer on a home or you have but it’s yet to be accepted, your lender may not accept a rate lock request from you without a bona fide, executed sales contract. However, if you are in a position to lock but your closing is more than 30 days away, expect to pay a bit more to secure your rate for a longer term lock.

Most interest rate locks are good for 15-30 days and while lenders will accept longer locks, expect to pay up to a full discount point for rate locks that extend beyond the standard lock period. This is especially so if there are renovations being made and there is still an outstanding construction loan to be taken care of. For extended locks, anything up to 90 days, don’t be surprised to be asked for a one percent origination fee, upfront and non-refundable, to secure that lock. That’s expensive, but maybe less expensive over the long run if you’re intending to keep the property for several years.