What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a specific number of points for you for a specified period while your application is processed. This means your interest rate can't rise during the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans typically costing more. A lender will agree to lock in an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a low rate, in addition to choosing a shorter rate lock period. The larger down payment you can make, the lower the interest rate will be, as you will have more equity from the beginning. You may choose to pay points to bring down your interest rate over the life of the loan, meaning you pay more up front. To a lot of people, this makes financial sense..

1st Credential Mortgage Inc can answer questions about rate lock periods and many others. Call us at (281) 778-0805.