What is a "rate lock period"?

Freezing the Rate

When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate for a certain number of days for the application process. This prevents you from getting through your entire application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter rate lock span of time

Other Interest Saving Strategies

In addition to opting for the shorter rate lock period, there are several ways you may be able to score the lowest rate. The bigger the down payment, the lower your interest rate will be, since you will have more equity from the beginning. You could opt to pay points to bring down your interest rate for the loan term, meaning you pay more initially. 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 are paying more initially, but you'll come out ahead in the end.

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

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