What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest rate and a particular number of points for you for a specified period during your application process. This ensures that your interest rate won't get higher during the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lender may agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Ways to Save on Interest

There are other ways to get a better rate, besides choosing a shorter rate lock period. The bigger the down payment, the smaller the interest rate will be, as you will be starting with more equity. You might choose to pay points to improve your rate over the loan term, meaning you pay more up front. For many people, this makes financial sense..

Nationwide Home Loans can walk you through the pitfalls of getting a mortgage. Call us at 5626935048.

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