What is a "rate lock period"?

Locking It In

When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a determined period for your application process. This means your interest rate can't grow during the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones typically costing more. The lending institution will agree to hold an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

More Ways to Save on Interest

In addition to opting for the shorter rate lock period, there are other ways you can get the best rate. A bigger down payment will result in a reduced interest rate, because you'll have a good amount of equity from the beginning. You can pay points to lower your interest rate over the loan term, meaning you pay more initially. To a lot of people, this makes financial sense..

At Pacificwide Lending, we answer questions about this process every day. Give us a call at 9254610500.

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Pacificwide Lending

CA License #01762647 NMLS#241222, TX License #241222, FL License # MBR 3291

7041 Koll Center Pkwy Ste 270 Ste 270
Pleasanton, CA 94566