What is a "rate lock period"?

Lock It In

A rate "lock" or "commitment" is a lender's promise to hold a particular interest rate and a particular number of points for you for a certain period during your application process. This saves you from working through your whole application process and discovering at the end that the interest rate has gotten higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in making this choice, will most likely have a higher rate than you would with a shorter span of time

Other Interest Saving Strategies

There are more ways to get a lower rate, in addition to going with a shorter rate lock period. The bigger the down payment, the lower your interest rate will be, since you will have more equity from the start. You could opt to pay points to improve your interest rate over the term of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to improve the interest rate over the term of the loan. You pay more up front, but you will come out ahead in the long run.

Channel Mortgage LLC can answer questions about rate lock periods & many others. Give us a call at (718) 639-9500.

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