What is a "rate lock period"?

Lock It In

A rate "lock" or "commitment" is a promise from the lender to freeze a specific interest rate and a certain number of points for you for a certain period during your application process. This prevents you from going through your entire application process and discovering at the end that the interest rate has gone up.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period typically costing more. A lending institution can agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Additional Ways to Save on Interest

There are other ways to get a low rate, besides opting for a shorter rate lock period. A larger down payment will get you a lower interest rate, since you will have a good amount of equity at the start. You can pay points to lower your interest rate for the term of the loan, meaning you pay more up front. For a lot of people, this makes financial sense..

The Mortgage Exchange Service LLC can walk you through the pitfalls of getting a mortgage. Call us: 703.255-5810.

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