What is a "rate lock period"?

Locking in your Interest Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a specific interest rate over a determined period for the application process. This protects you from working through your entire application process and discovering at the end that your interest rate has risen higher.

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter rate lock period

More Ways to Get a Great Interest Rate

In addition to going with a shorter lock period, there are more ways you are able to score the lowest rate. A larger down payment will result in a reduced interest rate, since you'll have a good deal of equity at the start. You may opt to pay points to bring down your rate over the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the interest rate over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you don't refinance early.

At Firelight Mortgage Consultants, we answer questions about this process every day. Call us at (720) 550-4235.

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