What is a "rate lock period"?

Shopping for a mortgage? We'll be glad to discuss our many mortgage solutions! Give us a call at (803) 391-3299. Ready to get started? Apply Here.

What is a Rate Lock?

When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate over a determined period for the application process. This ensures that your interest rate cannot rise while you are working through the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lending institution will agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Other Interest Saving Strategies

In addition to going with a shorter lock period, there are several ways you may be able to get the lowest rate. The more the down payment, the lower your interest rate will be, because you will have more equity from the beginning. You can pay points to reduce your rate over the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the interest rate over the term of the loan. You'll pay more up front, but you'll save money in the long run.

National Asset Mortgage, LLC can answer questions about rate lock periods & many others. Give us a call at (803) 391-3299.