What is a "rate lock period"?

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Lock It In

A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a specific number of points for you for a certain period of time while your application is processed. This means your interest rate won't get higher during the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution may agree to lock in an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Additional Ways to Save on Interest

In addition to opting for the shorter lock period, there are other ways you may be able to score the lowest rate. A larger down payment will get you a lower interest rate, because you'll have a good amount of equity at the start. You can pay points to bring down your rate over the life of the loan, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..

Paul M. Johnson - Mortgage Banker can walk you through the pitfalls of getting a mortgage. Call us at 512-326-2186.