What is a "rate lock period"?
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Locking in your Interest Rate
A rate "lock" or "commitment" is a lender's promise to lock in a specific interest rate and a particular number of points for you for a certain period of time during your application process. This ensures that your interest rate won't get higher while you are going through 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 may agree to hold an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Interest Saving Strategies
In addition to going with a shorter lock period, there are other ways you can get the best rate. A larger down payment will give you a lower interest rate, since you will have more equity at the start. You can pay points to bring down your rate over the term of the loan, meaning you pay more initially. To many people, this is a good option.
At Graves Owens Lending, we answer questions about this process every day. Give us a call at 405-321-5363.