What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a certain number of points for you for a specified period during your application process. This saves you from getting through your whole application process and finding out at the end that your interest rate has risen higher.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. A lender can agree to lock in an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a good rate, besides agreeing to a shorter rate lock period. A larger down payment will result in a lower interest rate, since you'll have more equity from the beginning. You could opt to pay points to bring down your interest rate for the term of the loan, meaning you pay more initially. To many people, this makes financial sense..

New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Call us: (941) 366-5800.