What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a particular number of points for you for a certain period during your application process. This means your interest rate cannot get higher during the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would with a shorter rate lock period

More Ways to Get a Great Interest Rate

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, because you will be entering the loan with more equity. You may choose to pay points to bring down your interest rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the rate over the life of the loan. You are paying more up front, but you'll come out ahead, especially if you don't refinance early.

At Omni Mortgage Corp., we answer questions about this process every day. Give us a call at 718-441-7000.

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