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 set a certain interest rate and a specific number of points for you for a specified period while your application is processed. This keeps you from going through your entire application process and discovering at the end that the interest rate has risen higher.

Although there can be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. The lending institution may agree to hold an interest rate and points for a longer span of time, like sixty 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

In addition to choosing a shorter lock period, there are several ways you are able to get the best rate. The larger the down payment, the smaller your interest rate will be, as you will be entering the loan with more equity. You can pay points to reduce your interest rate for the term of the loan, meaning you pay more initially. To many people, this makes sense and is a good deal..

At The Rosenbaum Lending Group, we answer questions about this process every day. Give us a call at 703-871-1329.