What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to hold a specific interest rate and a certain number of points for you for a specified period during your application process. This ensures that your interest rate won't get higher during the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lender can agree to freeze an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Additional Ways to Save on Interest

There are more ways to get a better rate, in addition to going with a shorter rate lock period. The more the down payment, the smaller the interest rate will be, as you will be entering the loan with more equity. You could opt to pay points to lower your rate for the loan term, meaning you pay more up front. To many people, this is a good option..

Reliance Mortgage Service, Inc can answer questions about rate lock periods and many others. Call us at 562 320-0510.

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