What is a "rate lock period"?
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a particular number of points for you for a specified period while your application is processed. This means your interest rate cannot grow as you are working through the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter period
Other Interest Saving Strategies
There are more ways to get a reduced rate, besides going with a shorter rate lock period. A larger down payment will get you a lower interest rate, because you are starting out with more equity. You can pay points to lower your rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the rate over the term of the loan. You'll pay more up front, but you will come out ahead in the long run.
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can answer questions about rate lock periods and many others. Give us a call: 214-300-8756.