What is a "rate lock period"?

Locking in your Interest Rate

When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate for a determined period for your application process. This protects you from going through your entire application process and learning at the end that the interest rate has gotten higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would with a shorter rate lock period

Other Interest Saving Strategies

There are other ways to get a better rate, in addition to opting for a shorter rate lock period. The more the down payment, the smaller the rate will be, since you will have more equity from the start. You may opt to pay points to lower your rate over the term of the loan, meaning you pay more initially. 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 up front, but you'll come out ahead in the long run.

At AmeriBest Mortgage, we answer questions about this process every day. Give us a call at 3217777277.