What is a "rate lock period"?

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Freezing the Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a determined period for the application process. This ensures that your interest rate cannot go up as you are going through the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter rate lock span of time

More Ways to Save on Interest

In addition to going with the shorter rate lock period, there are more ways you may be able to get the best rate. The larger the down payment, the lower your rate will be, as you will be entering the loan with more equity. You could choose to pay points to improve your interest rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you'll save money, especially if you keep the loan for the full term.

At Liberty Mortgage Associates Inc., we answer questions about this process every day. Give us a call at 877-799-4015.