Rate Lock Periods
What is a "rate lock period"?
Freezing the Rate
When you’re offered a “rate lock” from your lender, it means that you are guaranteed to get a certain interest rate over a certain number of days for your application process. This means your interest rate won’t rise during the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period typically costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would with a shorter rate lock period
Other Interest Saving Strategies
There are other ways to get a good rate, in addition to choosing a shorter rate lock period. A larger down payment will give you a better interest rate, since you will have more equity from the beginning. You can pay points to bring down your interest rate over the life of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You’ll pay more initially, but you’ll save money in the long run.