What is a "rate lock period"?
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a certain number of points for you for a specified period of time during your application process. This protects you from getting through your entire application process and discovering at the end that your interest rate has gotten higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones typically costing more. The lender can agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to opting for a shorter rate lock period, there are more ways you are able to score the best rate. A bigger down payment will get you a lower interest rate, since you'll have a good amount of equity from the beginning. You can pay points to improve your rate over the life of the loan, meaning you pay more up front. For many people, this makes financial sense..
At Ward Kilduff Mortgage, we answer questions about this process every day. Call us: (860) 658-7100.
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