What is a "rate lock period"?

What is a Rate Lock?

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a determined period while you work on your application process. This ensures that your interest rate won't rise while you are going through the application process.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer period typically costing more. A lender can agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Additional Ways to Save on Interest

In addition to opting for a shorter rate lock period, there are more ways you may be able to score the lowest rate. A bigger down payment will get you a lower interest rate, because you're starting out with a good deal of equity. You can pay points to lower your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you don't refinance early.

Boardwalk Mortgage can answer questions about rate lock periods & many others. Call us: 1-800-606-2794.