What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to lock in a specific interest rate and a certain number of points for you for a specified period while your application is processed. This keeps you from getting through your entire application process and learning at the end that your interest rate has gone up.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans generally costing more. A lending institution may agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Additional Ways to Save on Interest

In addition to choosing a shorter rate lock period, there are more ways you can score the best rate. A bigger down payment will get you a lower interest rate, because you are starting out with more equity. You may opt to pay points to lower your interest rate over the loan term, meaning you pay more up front. For a lot of people, this makes sense and is a good deal..

New Millennium Mortgage Co. NMLS: 331173 can answer questions about rate lock periods and many others. Call us at (941) 366-5800.