What is a "rate lock period"?
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What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to freeze a certain interest rate and a particular number of points for you for a specified period while your application is processed. This saves you from going through your entire application process and discovering at the end that your interest rate has gone up.
Rate lock periods can vary in length, between 15 to 60 days, with the longer ones typically costing more. A lending institution may agree to hold an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Ways to Save on Interest
In addition to going with a shorter rate lock period, there are more ways you can attain the best rate. A larger down payment will give you a reduced interest rate, since you'll have more equity at the start. You might opt to pay points to reduce your interest rate for the term of the loan, meaning you pay more up front. For many people, this makes financial sense.
Best Capital Funding can answer questions about rate lock periods and many others. Call us: 909-358-4090.