What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a particular number of points for you for a specified period of time while your application is processed. This ensures that your interest rate will not get higher during the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans usually costing more. A lending institution will agree to hold an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to going with the shorter rate lock period, there are more ways you can attain the lowest rate. The larger down payment you pay, the better the interest rate will be, since you will be entering the loan with more equity. You can pay points to lower your rate over the term of the loan, meaning you pay more up front. To a lot of people, this is a good option..

Front Range Lending can walk you through the pitfalls of getting a mortgage. Call us: 7202537070.