What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to set a particular interest rate and a particular number of points for you for a specified period during your application process. This ensures that your interest rate won't grow during the application process.

While there might be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. A lender will agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a lower rate, besides opting for a shorter rate lock period. A larger down payment will result in a reduced interest rate, because you're starting out with a good deal of equity. You can pay points to lower your interest rate for the term of the loan, meaning you pay more initially. For many people, this makes financial sense..

At Metro Mortgage, we answer questions about this process every day. Give us a call at 4054054054.

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