Q. We are in the process of buying a home. We have excellent credit and are putting 15% down. Our mortgage representative urged us to lock in the rate of 6.5% about three weeks ago. One week later, the government bailed out Fannie Mae and Freddie Mac and interest rates dropped. We immediately asked our rep to try and get the rate lowered. He stalled, was out, then his higher up was out. Now, he says we can have a lower rate of 5.75% (great!), but we will have to pay another point. That doesn't seem right. Do we have any recourse? We are less than a week from settlement.

A. Unfortunately, you are stuck. If you lock in the rate, it's locked. Period. It is unfortunate, in your case. And it's also unfortunate that you don't have time to find a new lender, because that's what we would have suggested.

This situation will cost you some extra money. But if Freddie and Fannie had filed for bankruptcy and rates had shot up, you would have been protected from the rate hike and considered yourself lucky. Locking a rate is a gamble. This time you lost.

To make a good decision as to whether to pay points or not, go to the Interest.com mortgage points calculator. It might help you with your decision.