What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a lender's promise to freeze a certain interest rate and a certain number of points for you for a certain period while your application is processed. This means your interest rate can't go up as you are going through the application process.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer ones usually costing more. A lending institution will agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to choosing the shorter rate lock period, there are several ways you may be able to get the lowest rate. The bigger down payment you make, the smaller your interest rate will be, because you will be entering the loan with more equity. You may opt to pay points to improve your interest rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the interest rate over the life of the loan. You'll pay more initially, but you will save money, especially if you don't refinance early.

At CHASE MORTGAGE, Inc. #317430, we answer questions about this process every day. Give us a call: 4357556622.