What is a "rate lock period"?

Lock It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate over a determined period for your application process. This ensures that your interest rate can't rise during the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. The lender will agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

In addition to choosing the shorter rate lock period, there are other ways you can get the best rate. A larger down payment will result in a reduced interest rate, since you're starting out with more equity. You might opt to pay points to lower your interest rate over the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You pay more up front, but you'll come out ahead in the end.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Call us: (281) 778-0805.

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