What is a "rate lock period"?

What is a Rate Lock?

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 of time during your application process. This means your interest rate can't go up during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter rate lock period

More Ways to Save on Interest

In addition to going with the shorter rate lock period, there are other ways you can get the lowest rate. The bigger down payment you pay, the smaller the interest rate will be, since you will be entering the loan with more equity. You could choose to pay points to lower your 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 bring the rate down over the life of the loan. You'll pay more initially, but you'll save money, especially if you don't refinance early.

Custom Lending Group can walk you through the pitfalls of getting a mortgage. Call us: (707) 252-2700.

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