What is a "rate lock period"?

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to hold a specific interest rate and a certain number of points for you for a specified period of time during your application process. This prevents you from getting through your entire application process and discovering at the end that your interest rate has gotten higher.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period generally costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would with a shorter span of time

More Ways to Save on Interest

There are more ways to get a better rate, in addition to opting for a shorter rate lock period. The bigger the down payment, the better the rate will be, because you will be entering the loan with more equity. You could opt to pay points to reduce your interest rate over the term of the loan, meaning you pay more up front. To many people, this makes sense and is a good deal..

Diamond Mortgage, LLC can answer questions about rate lock periods and many others. Give us a call at 3178427744.