What is a "rate lock period"?

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Locking in your Interest Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days for your application process. This means your interest rate cannot grow as you are working through the application process.

Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. The lender can agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to opting for the shorter rate lock period, there are several ways you can score the best rate. A larger down payment will give you a better interest rate, since you'll have more equity at the start. You might opt to pay points to lower your interest rate over the term of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the life of the loan. You'll pay more up front, but you'll save money in the end.

US Financial Mortgage Group can answer questions about rate lock periods & many others. Call us at 5596747669.