What is a "rate lock period"?
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to set a specific interest rate and a particular number of points for you for a specified period of time during your application process. This ensures that your interest rate will not get higher during the application process.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans usually costing more. A lender can agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are other ways to get a reduced rate, in addition to choosing a shorter rate lock period. The bigger down payment you can make, the smaller the interest rate will be, as you will have more equity from the start. You may choose to pay points to bring down your rate over the life of the loan, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..
At F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org), we answer questions about this process every day. Give us a call: 214-300-8756.