What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a specific number of points for you for a certain period while your application is processed. This keeps you from going through your whole application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans usually costing more. A lender may agree to freeze an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to opting for a shorter rate lock period, there are several ways you are able to score the lowest rate. The bigger the down payment, the smaller the rate will be, because you will have more equity from the beginning. You can pay points to lower your rate over the loan term, meaning you pay more initially. For a lot of people, this makes financial sense..

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call at 2817780805.