What is a "rate lock period"?

What is a Rate Lock?

When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate for a determined period while you work on your application process. This ensures that your interest rate will not get higher while you are working through the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period usually costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would with a shorter period

More Ways to Save on Interest

In addition to going with the shorter lock period, there are several ways you may be able to get the best rate. The bigger the down payment, the smaller the rate will be, as you will have more equity from the beginning. You can pay points to bring down your rate for the term of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You will pay more up front, but you will come out ahead in the end.

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