What is a "rate lock period"?

Locking It In

When you're promised a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate for a determined period for your application process. This means your interest rate can't rise as you are going through the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period usually costing more. A lending institution will agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

In addition to going with a shorter rate lock period, there are several ways you can attain the best rate. A larger down payment will get you a reduced interest rate, since you will have more equity at the start. You can pay points to reduce your interest rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will come out ahead in the long run.

Executive Lending Group can walk you through the pitfalls of getting a mortgage. Give us a call: 4056158543.

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A Division of 1st Capital Mortgage LLC

2244 36th Avenue NW
Norman, OK 73072