A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a certain number of points for you for a certain period of time during your application process. This ensures that your interest rate can't go up during the application process.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period typically costing more. The 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 higher than that of a rate lock of a shorter period.
There are other ways to get a good rate, in addition to choosing a shorter rate lock period. The bigger the down payment, the better your rate will be, since you will be entering the loan with more equity. You can pay points to bring down your rate over the term of the loan, meaning you pay more initially. To many people, this is a good option..
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.