What is a "rate lock period"?

Freezing the Rate

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a determined period for the application process. This saves you from getting through your whole application process and discovering at the end that your interest rate has gotten higher.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones usually costing more. The lender can agree to lock in an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to opting for a shorter rate lock period, there are several ways you may be able to get the best rate. The bigger down payment you make, the lower the interest rate will be, because you will have more equity from the start. You may opt to pay points to improve your rate for the loan term, meaning you pay more up front. To many people, this makes financial sense..

Nationwide Home Loans can answer questions about rate lock periods & many others. Give us a call at 5626935048.

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Nationwide Home Loans

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16211 Whittier Blvd.
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