What is a "rate lock period"?

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Freezing the Rate

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

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones typically costing more. You can get a longer period for your lock, but in doing so, will likely have a higher interest rate than you would have with a shorter rate lock span of time

Other Ways to Save on Interest

There are more ways to get a better rate, besides choosing a shorter rate lock period. The bigger down payment you make, the better the rate will be, as you will have more equity from the beginning. You might choose to pay points to improve your rate over the loan term, meaning you pay more initially. 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'll pay more initially, but you will save money in the long run.

Front Range Lending can walk you through the pitfalls of getting a mortgage. Give us a call: 3032279555.