What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a particular number of points for you for a certain period while your application is processed. This means your interest rate won't get higher while you are going through the application process.

Rate lock periods can vary in length, between 15 to 60 days, with the longer period generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter rate lock span of time

More Ways to Get a Great Interest Rate

In addition to going with a shorter lock period, there are other ways you can score the best rate. A bigger down payment will give you a better interest rate, because you will have a good deal of equity at the start. You could opt to pay points to improve your rate over the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the life of the loan. You'll pay more up front, but you will come out ahead in the end.

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

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