What is a "rate lock period"?

What is a Rate Lock?

When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate for a certain number of days for the application process. This protects you from working through your entire application process and learning at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period generally costing more. The lending institution can 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 that of a rate lock of fewer days.

Other Ways to Save on Interest

In addition to choosing the shorter rate lock period, there are several ways you can attain the best rate. The larger down payment you can pay, the lower your interest rate will be, as you will be entering the loan with more equity. You may choose to pay points to improve your interest rate over the loan term, meaning you pay more up front. For a lot of people, this makes financial sense..

Omni Mortgage Corp. can answer questions about rate lock periods and many others. Call us at 718-441-7000.

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