Rate Locks, Discount Points and Temporary Buydowns

Identify the commitment in writing

CFPB notes that some lenders may lock a rate when issuing a Loan Estimate and others may not. The form indicates whether a rate is locked and the relevant date. Ask the lender which terms are locked, the expiration date, any extension terms, and what events could require a revised estimate. A verbal assurance does not provide the same comparison record as the written loan documents.

• Record the rate-lock status and expiration beside each estimate.
• Ask whether the lock covers points and lender credits.
• Ask what happens if the scheduled closing date changes.

Compare upfront and ongoing cost

CFPB describes points as an upfront fee paid to the lender for a lower interest rate. Lender credits can offset closing costs but may be connected with a higher rate. Treat a temporary buydown as a separate contractual arrangement: ask the lender who funds it, how the payment changes over time and what the payment becomes after the temporary period. A hypothetical buyer expecting to keep a loan for a short period may evaluate upfront points differently from a buyer expecting a long hold; neither assumption predicts a refinance or resale.

• Request estimates with and without points using the same scenario.
• Compare total payment, cash to close and the post-temporary payment.
• Do not assume a temporary payment is the permanent obligation.

Recheck before signing

CFPB says borrowers should ask why a rate or fees differ between a Loan Estimate and Closing Disclosure. If a lock is shown, ask about any difference immediately. A lender can explain the actual lock agreement and costs; this page does not advise on a particular loan.