What is a "rate lock period"?

What is a Rate Lock?

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

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period usually 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 have with a shorter rate lock span of time

Other Interest Saving Strategies

There are more ways to get a reduced rate, in addition to choosing a shorter rate lock period. The larger down payment you pay, the smaller your rate will be, because you will have more equity from the start. You might 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 long run.

At 1st Credential Mortgage Inc, we answer questions about this process every day. Give us a call: 2817780805.