What is a "rate lock period"?
Locking It In
A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a particular number of points for you for a specified period of time during your application process. This ensures that your interest rate won't rise while you are going through the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans usually costing more. A lender can agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter lock period, there are more ways you are able to score the best rate. A bigger down payment will get you a reduced interest rate, because you are starting out with more equity. You may choose to pay points to improve your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you will save money in the end.
Valley Savers Mortgage, LLC can answer questions about rate lock periods and many others. Call us: (602) 332-9544.
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