What is a "rate lock period"?

What is a Rate Lock?

When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate for a determined period while you work on the application process. This means your interest rate won't go up during the application process.

Although there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter span of time

Other Interest Saving Strategies

In addition to opting for a shorter lock period, there are several ways you can score the best rate. The more the down payment, the smaller the interest rate will be, since you will have more equity from the beginning. You could choose to 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 bring the rate down over the term of the loan. You'll pay more initially, but you will come out ahead in the long run.

At Foxfield Financial, we answer questions about this process every day. Call us at 720-598-8300.

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