What is a "rate lock period"?
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a certain number of points for you for a specified period of time during your application process. This ensures that your interest rate can't go up during the application process.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period usually costing more. A lending institution can agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a low rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the better your rate will be, because you will have more equity from the start. You can pay points to lower your rate for the term of the loan, meaning you pay more initially. To a lot of people, this is a good option..
At U.S.A. Lending, Inc., we answer questions about this process every day. Call us: 305-967-7200.