What is a "rate lock period"?

What is a Rate Lock?

When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days for the application process. This means your interest rate won't rise while you are going through the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans typically costing more. A lender will 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 fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a good rate, besides agreeing to a shorter rate lock period. A larger down payment will give you a lower interest rate, since you will be starting out with more equity. You can pay points to improve your rate over the life of the loan, 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 term of the loan. You'll pay more initially, but you'll save money in the long run.

Halpern & Associates Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us: (305) 535-2230.

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