What is a "rate lock period"?

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a specific number of points for you for a specified period of time while your application is processed. This saves you from working through your entire application process and learning at the end that your interest rate has gone up.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter span of time

More Ways to Get a Great Interest Rate

In addition to choosing the shorter lock period, there are more ways you can get the best rate. The bigger down payment you can pay, the better the interest rate will be, because you will be starting with more equity. You can pay points to improve your rate over the life of the loan, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..

At Refresh Funding, we answer questions about this process every day. Give us a call at 305-800-3863.

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