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 keep a set interest rate for a certain number of days while you work on the application process. This means your interest rate can't get higher during the application process.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would with a shorter rate lock period

Other Interest Saving Strategies

There are more ways to get a good rate, besides agreeing to a shorter rate lock period. A bigger down payment will get you a lower interest rate, since you will have more equity at the start. You can pay points to bring down 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 bring the rate down over the term of the loan. You'll pay more initially, but you'll save money in the end.

Atlantic Financial Services can walk you through the pitfalls of getting a mortgage. Call us: (732) 969-9300.

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