What is a "rate lock period"?

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What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a certain number of points for you for a specified period during your application process. This keeps you from working through your entire application process and finding out at the end that the interest rate has risen higher.

While there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lending institution may agree to hold an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a low rate, in addition to opting for a shorter rate lock period. A bigger down payment will get you a lower interest rate, because you'll be starting out with more equity. You can pay points to reduce your interest rate over the term of the loan, meaning you pay more initially. To many people, this is a good option..

Southern Trust Mortgage can answer questions about rate lock periods & many others. Give us a call at (301)-938-1655.