What is a "rate lock period"?

Lock It In

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a specific number of points for you for a specified period while your application is processed. This means your interest rate cannot grow during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. A lending institution may agree to hold 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 with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are other ways to get a lower rate, besides opting for a shorter rate lock period. A larger down payment will get you a lower interest rate, because you are starting out with more equity. You might choose to pay points to bring down your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you will save money in the end.

AmeriBest Mortgage can answer questions about rate lock periods and many others. Give us a call: 3217777277.