What is a "rate lock period"?

Lock It In

When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a determined period while you work on your application process. This saves you from going through your whole application process and finding out at the end that your interest rate has risen higher.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period generally costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher rate than you would have with a shorter period

Other Interest Saving Strategies

In addition to choosing a shorter lock period, there are other ways you may be able to score the lowest rate. The larger the down payment, the better the interest rate will be, since you will be starting with more equity. You can pay points to improve your rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the rate over the life of the loan. You will pay more up front, but you'll come out ahead in the long run.

Firelight Mortgage Consultants can answer questions about rate lock periods and many others. Give us a call at (303) 228-2254.

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