What is a "rate lock period"?

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Locking in your Interest Rate

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

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter span of time

Other Ways to Save on Interest

There are more ways to get a lower rate, in addition to choosing a shorter rate lock period. The more the down payment, the smaller your interest rate will be, because you will be entering the loan with more equity. You might choose to pay points to reduce your interest rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the rate over the term of the loan. You are paying more up front, but you will save money in the long run.

Sunrise Mortgage Group can answer questions about rate lock periods and many others. Call us: -.