What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a particular number of points for you for a certain period during your application process. This means your interest rate can't grow during the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution can agree to lock in an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are more ways to get a better rate, in addition to choosing a shorter rate lock period. The bigger the down payment, the better the interest rate will be, since you will have more equity from the beginning. You can pay points to bring down your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you'll save money in the end.

Executive Lending Group can answer questions about rate lock periods and many others. Call us: 4056158543.

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Executive Lending Group

A Division of 1st Capital Mortgage LLC

2272 36th Avenue NW
Norman, OK 73072