Most rate locks offered by lenders range from 30-90 days, with 60-75 the most common. But what if you're buying new construction and the home won't be ready for 6 months? Here are some of the most common programs available.

1. Rate Cap

Lenders offering Rate Cap Options will extend your commitment for a specific period of time guaranteeing a maximum rate from date of application. Standard time frames are as follows:

• 120 Days - Current Rate + .125%
• 150 Days - Current Rate + .250%
• 180 Days - Current Rate + .375%
• 270 Days - Current Rate + .500%
• 360 Days - Current Rate + .625%

For example: If the lender's current rate is 7.00% and you need a 120 day rate lock, the lender will quote your rate at 7.125%. This cap option gives you some interest rate protection over a 4 month period of time.

Be sure you have the opportunity to re-lock your rate at some point during the processing of your loan if rates are lower. If the bank's rate 5 days prior to closing is 6.75%, be sure you have the opportunity to close at 6.75%

Also ask the lender if there are any additional fees associated with the rate cap option. Some lenders will charge a 1/2 or 1 pt. fee to lock in which may or may not be refundable at closing.

Word to the wise: keep the fees you pay to the lender at a minimum! When you get closer to your anticipated closing date, you may want to shop around for interest rates again. If another lender is offering a very competitive rate you want to lock in, you will lose any fees paid to the lender which gave you the rate cap. You may want to do some financial calculations to see if losing the fees will make sense based on current rates. Whether or not interest rates are rising or falling may also factor in to your decision.

2. True Extended Rate Lock

Some lenders will extend their current rate for a period of time if you choose to pay an additional non-refundable fee. For example; the lender will lock today's rate for 120 days if you pay a 1/2 pt. non-refundable fee. You may be required to pay the 1/2 pt. at application or commitment; some lenders will allow you to pay the 1/2 pt. after your initial rate lock period expires and only if the extension is needed. Again, a falling or rising rate market may factor into your decision.