What Happens If Interest Rates Change After You Go Under Contract in Washington?
Interest rates can change at any time during a real estate transaction, including after a buyer goes under contract. When this happens, the impact depends on whether the buyer has locked their mortgage interest rate with their lender.
If the buyer has already locked the rate, the interest rate usually stays the same until closing. If the buyer has not locked the rate, the loan terms may change if market interest rates move before the loan is finalized.
Because interest rates directly affect monthly payments and loan approval, buyers typically work closely with their lender during this stage of the transaction.
What a Rate Lock Means
Most lenders offer buyers the option to lock their interest rate once they are under contract.
A rate lock means:
- the interest rate is guaranteed for a specific period
- the rate will not change before closing
- the buyer is protected from market increases during the lock period
Common rate lock periods include 30, 45, or 60 days, depending on the lender and expected closing timeline.
What Happens If Rates Increase
If interest rates increase and the buyer has not locked the rate, the buyer’s monthly mortgage payment may increase.
This can sometimes affect the buyer’s loan qualification if the higher payment pushes the buyer beyond the lender’s approval limits.
In some situations, the buyer may need to:
- increase the down payment
- change loan programs
- adjust the purchase price range
What Happens If Rates Decrease
If interest rates drop before the loan is finalized, buyers may benefit from a lower rate depending on the lender’s policies.
Some lenders allow buyers to re-lock at a lower rate or adjust the loan terms before closing.
However, this depends on the lender and whether the buyer already locked the interest rate.
Why Rate Timing Matters During Escrow
The period between mutual acceptance and closing often lasts several weeks. During this time, lenders complete the full loan approval process.
Because financial markets change daily, interest rates may move while the loan is being finalized.
That is why many buyers choose to lock their rate shortly after going under contract to avoid uncertainty.
Why Rate Changes Usually Do Not Affect the Seller
Interest rate changes primarily affect the buyer and the lender. The seller typically does not see the buyer’s interest rate or loan details.
As long as the buyer can still obtain financing and close on time, the transaction usually continues without any change to the seller’s terms.
Bottom Line
Interest rates can change after a buyer goes under contract in Washington real estate. If the buyer has locked their rate, the loan terms typically stay the same until closing. If the rate is not locked, the buyer’s loan payment or qualification may change depending on market conditions.
FAQ
Can mortgage interest rates change after you go under contract?
Yes. Mortgage interest rates can change at any time unless the buyer has locked their rate with the lender.
What is a mortgage rate lock?
A rate lock guarantees the buyer’s interest rate for a specific period, usually 30 to 60 days, while the loan is processed.
Can rising interest rates affect loan approval?
Yes. If rates increase significantly and the buyer has not locked their rate, the higher payment could affect loan qualification.
Do sellers see a buyer’s interest rate?
No. Sellers typically do not see the buyer’s mortgage interest rate or loan details during the transaction.