What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a specific number of points for you for a certain period while your application is processed. This keeps you from working through your whole application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones usually costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would with a shorter period

Other Ways to Save on Interest

There are more ways to get a reduced rate, in addition to opting for a shorter rate lock period. The larger down payment you can pay, the smaller your rate will be, since you will have more equity from the start. You might choose to pay points to lower your rate for the life of the loan, meaning you pay more up front. To many people, this makes financial sense..

Rick Brown, Elite Financing Group can walk you through the pitfalls of getting a mortgage. Call us at 5122791520.

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Rick Brown, Elite Financing Group

RMLO NMLS #279018 Company NMLS #212369

RMLO NMLS #279018 Company NMLS #212369 3415 Greystone Drive Suite 205
Austin, TX 78731