What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a certain number of points for you for a specified period while your application is processed. This saves you from getting through your whole application process and learning at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher rate than you would with a shorter rate lock span of time

Other Ways to Save on Interest

There are more ways to get a reduced rate, in addition to going with a shorter rate lock period. A larger down payment will get you a reduced interest rate, since you'll have a good deal of equity at the start. You might choose to pay points to lower your interest rate for the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You will pay more up front, but you'll save money in the long run.

Not Your Average Lender can answer questions about rate lock periods & many others. Call us: 9722039033.

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