What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period while your application is processed. This means your interest rate will not grow during the application process.

Although there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter rate lock span of time

Other Interest Saving Strategies

There are other ways to get a lower rate, besides opting for a shorter rate lock period. The bigger down payment you can pay, the better your rate will be, because you will have more equity from the beginning. You may opt to pay points to reduce your rate for the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You are paying more initially, but you will save money in the long run.

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