Are there any penalties for having a rate-lock expire?

Sorry if this has already been asked/answered, but I couldn't find it.

I currently have a rate-lock that will expire Sept. 28, due to a combination of policies I can not close on the house I am purchasing right now and will probably go past my rate-lock.  Are there generally any penalties for having a rate-lock expire?  I've asked my LO but she kinda didn't answer it directly, and the company website doesn't have the answer on it.  If there are no penalties I'd just let it expire and re-lock the next day as right now the rates are better than what I locked at so paying more for an extension doesn't look too enticing.

Thanks!

Depends on your lenders policies, but most banks would let you re-lock at what is called "worst-case" pricing.  So, you should be able to let your lock expire, but since current rates are better, you only get to re-lock at your old rate - not the new improved rates....hence "worst-case".  WHY?  1) because they can  2) because otherwise you might NEVER close, always looking for a better rate.  The banks production needs to be stable.  The good news is that you don't have to pay any "re-lock" fees, and your rate is not going up.  NOW, be absolutely sure that your rate is higher than current market, because when you let it expire, you will be floating for a minimum of 1 day overnight.  This is something that should be covered in detail with your LO. 

Thanks Curt!  That makes sense.  I'll have to make sure my LO gives me straight answers about what the policies are.

Cliff,

With the limited information, getting a stright forward answer from your loan officer is important.  You may want to ask if she(LO)  has a investor/bank that has the ability to close within 2 weeks. Any purchase loans come with there own hiccups and if you unsure of anything call your loan officer.

Voyage Home Loans

Mike Kim