What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a specific number of points for you for a specified period while your application is processed. This ensures that your interest rate cannot go up as you are working through the application process.

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

More Ways to Get a Great Interest Rate

There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. A bigger down payment will result in a lower interest rate, since you'll have a good deal of equity from the beginning. You can pay points to bring down your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the rate over the term of the loan. You'll pay more initially, but you will save money in the end.

Statewide Funding can walk you through the pitfalls of getting a mortgage. Give us a call at (415) 456-7802.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question