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What is a "rate lock period"?

Lock It In

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

While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lending institution can agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are more ways to get a better rate, in addition to choosing a shorter rate lock period. The bigger down payment you pay, the smaller your interest rate will be, since you will have more equity from the beginning. You could opt to pay points to bring down your interest rate over the loan term, meaning you pay more up front. To many people, this makes financial sense..

Net Equity Financial Mortgage can answer questions about rate lock periods & many others. Call us: (215)741-3131.

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