What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a certain number of points for you for a specified period while your application is processed. This means your interest rate cannot get higher while you are going through the application process.

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

Other Ways to Save on Interest

There are other ways to get a reduced rate, besides choosing a shorter rate lock period. A bigger down payment will get you a lower interest rate, since you will be starting out with a good deal of equity. You can pay points to lower 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 improve the interest rate over the life of the loan. You'll pay more initially, but you will come out ahead, especially if you keep the loan for a long time.

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

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