What is a "rate lock period"?

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What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a certain number of points for you for a certain period during your application process. This ensures that your interest rate cannot rise as you are going through the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones typically costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would with a shorter span of time

More Ways to Get a Great Interest Rate

In addition to opting for the shorter rate lock period, there are more ways you can get the best rate. A bigger down payment will result in a reduced interest rate, since you'll be starting out with a good deal of equity. You can pay points to reduce your interest rate for the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

At VITEK MORTGAGE GROUP, we answer questions about this process every day. Give us a call: 800-530-9421.