How to Protect Your Mortgage Rate and Your Sanity When Buying a Luxury Home in Austin

TL;DR
 If you’re eyeing a $1M+ property in Austin and locking your rate with a Lender, it’s critical to understand rate lock extensions. Missing that expiration can cost you both a higher rate and a steep fee. This quick read breaks down how they work, why timing matters, and includes a real example to keep you ahead of the curve.

When you enter a contract on a home in Northwest Hills or downtown Austin and your Lender offers a 30, 45, or 60 day rate lock, it means your interest rate is guaranteed as long as your loan closes before that date and your financials stay consistent. (Wells Fargo)

Extensions Can Cost You

If your closing gets delayed and that lock expiration is near, you’ll need to extend it or risk losing your locked rate. That means you may have to relock at the current market rate, which could be higher.
Extension fees vary by Lender and by how long you need. Typical costs range between 0.15% and 0.40% of the loan amount. (Financial Samurai)

Why This Matters in Austin

In the luxury market, things like high end inspections, design negotiations, or HOA approvals can cause unexpected delays. When that happens, your Lender’s lock clock keeps ticking. If you’re not tracking it, you’re exposed to potential rate increases and costly extensions.
As your REALTOR®, I help you keep that timeline in focus. I also make sure you and your Mortgage Lender are aligned on when the lock expires and what it will cost if you need extra time.

An Example That Hits Home

Yes, that’s a pun above.

Let’s say you’re purchasing a $1.5M home in Austin with an $800,000 loan. Your Lender gives you a 45 day rate lock.

A week before closing, your inspection finds a foundation repair that requires extra time for contractor sign off. Your Lender charges 0.17% of the loan amount for a lock extension. (Financial Samurai)

That’s $1,360 to extend the lock and protect your rate. If rates rise by even a quarter point, your monthly payment could increase far more than that. So paying the extension fee can be a strategic move rather than a setback.

How You Stay In Control

• Ask your Lender for the exact expiration date of your lock and what the extension cost would be if needed.
• Keep an eye on your timeline, because inspections, appraisals, and repairs often push closings back.
• If the market is improving, it might make sense to let your lock expire and relock at a better rate.
• When purchasing luxury real estate, consider choosing a longer lock upfront. It often costs less than a last minute extension.
  

Final Word for the Seers

If you’re purchasing or selling a $1M+ home in Austin, think of your rate lock like a countdown clock. My role is to help you see the full field, including timing, numbers, and negotiation, so you can make informed, strategic decisions. Know your lock date. Know your options. And, know that a smart move here can save you serious money later.

Let’s make sure your next move in Austin is financially strategic. Reach out and we’ll build your timeline together so you stay in control of your rate and your results.

Jennifer S. Goodman
REALTOR® | GRI
ΓEA⅃ Broker, LLC
📱 512.839.3855

Photo credit: Zillow.com