Rate Protection & Rate Lock

These two optional mortgage features offer you the safety of a guaranteed maximum interest rate, even if mortgage rates rise before you close your mortgage.

Is Rate Protection right for me?

Rate protection allows you to establish a maximum rate for closing with the ability to receive a lower rate if rates drop (provided your closing date does not extend past the rate protection term). In the event that rates decrease, you will have a one-time float down option to lock into a lower rate, regardless of how low they go.

Consider this option if you are not ready to lock and anticipate a drop in rates.  In nearly all scenarios, Rate Protection is the preferred rate lock option.  It allows you the security of locking in an interest rate, yet provides the flexibility of taking advantage of a lower rate should the market move in your favor.

Prior to choosing a home, you can opt for 90 or 120-day rate protection when you use Merrill Lynch's Qualified Buyer^SM program to obtain preapproval for a loan.

Rate protection features:

• Available for home purchases, refinances and preapprovals.
• 30-, 60-, and 90-day options are available when purchasing a home.
• 60- and 90-day options are available when refinancing a home.
• Rates can be selected and protected once a pre-purchase application has been approved.  The only option available for pre-purchase rate locks is the Rate Protection program.  In these cases, the 90- or 120- day rate programs must be used.
• If rates increase before your loan closing, the protected rate does not increase beyond your cap rate.
• If rates decrease before your loan closing, you have a one-time option to lock at the lower rate.
• Purchase/Pre-purchase:
• For the 30-day option, you will have a 25-day window between 30 and 5 days prior to closing to use the one-time float down option.
• For the 60- and 90-day options, you will have a 55-day window between 60 and 5 days prior to closing to use the one-time float down option.
   
• Refinance:
• For the 60- and 90-day options, you will have a 30-day window between 35 and 5-days prior to closing to use the one-time float down option. 
  
  
• If you have not used your one-time float down option 5 days prior to your scheduled closing date, you will receive the lower of your protected rate OR the current market rate 5 days prior to closing.
• Rate Protection can be selected throughout the loan origination process, so long as the rate is currently floating. 

Is a Rate Lock right for me?

A rate lock option is also available at any time during your loan process once a contract of sale has been secured, provided your closing date does not extend past the lock term. Unlike rate protection, the rate lock option does not provide the opportunity to choose the lower rate in the event that rates fall. 

Rate Lock features:

• Available for home purchases and refinances after a closing date has been set.
• 30-, 60-, 90-, and 120-day options are available when purchasing a home.
  (The 30-day rate lock option may not be available during high volume mortgage activity.)
• 60- and 90-day options are available when refinancing a home.