You pad the closing date to give everybody breathing room, because a longer timeline feels safer and costs nothing. Rate locks are priced in fifteen-day increments, and every increment you add is a higher rate on the same loan.
This is a lender explaining lock versus float to buyers, and most of it is the stock explanation. The part that lands on the agent's desk is at the end, about duration.
Locks are not open-ended. "Mortgage lock rate locks, they go in 15-day increments. So, you can lock on a 15-day, you can lock on a 30-day, a 45-day, a 60-day. You can lock all the way out to 120 days. But, the longer the duration of lock you need, the higher the rate."
He puts numbers on it as an illustration. His example rate that day, "6.8, this is a 30-day lock". Stretch it: "if you need the same thing, but you need the rate to be locked for 45 days, well, your rate may be 6.9%". Go all the way out and "you might have a rate at 7% or maybe 7.1%". Those are his example figures, not a published schedule, and the spread varies by lender and by day.
So his instruction is to match the lock to the actual timeline rather than the comfortable one: "make sure not only do you lock in, you also lock in at the time frame that you really need to condense that time to make the savings as much as it can."
The other side is that a lock is a one-way door. "Once you're locked in, you're locked in." His workaround is being a broker with access to many lenders, so if rates drop he can withdraw the lock and move the file, "as long as we have enough time to get you closed. You We usually need about 10 to 14 days for that."
He has been doing this, he says, for over 38 years.
“So, you can lock on a 15-day, you can lock on a 30-day, a 45-day, a 60-day. You can lock all the way out to 120 days. But, the longer the duration of lock you need, the higher the rate.”
The closing date is treated as a scheduling field and it is a pricing field. A sixty-day close written because the buyer's lease ends then, or because you wanted slack for an inspection, hands the buyer a worse rate for the entire life of the loan. Nobody itemizes that anywhere. The buyer sees a rate, assumes it is the market's rate, and never learns that fifteen days of padding was part of it.
That does not mean writing the tightest possible date. A lock that expires before closing is an extension fee or a re-lock at whatever the market is that week, which is a worse outcome than starting fifteen days longer. The move is to ask the lender the actual question before you write: what does the rate look like at thirty days versus forty-five, and what does your file realistically need. Then write the date that answer supports, and know the ten to fourteen day floor if the buyer might want to move the file later.