What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a particular number of points for you for a specified period during your application process. This saves you from working through your entire application process and learning at the end that your interest rate has gone up.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would have with a shorter rate lock span of time

More Ways to Get a Great Interest Rate

In addition to opting for the shorter rate lock period, there are several ways you can attain the best rate. The larger down payment you can make, the lower your rate will be, since you will have more equity from the start. You may choose to pay points to reduce your rate over the loan term, 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 will pay more up front, but you will save money, especially if you keep the loan for a long time.

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

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