What is a "rate lock period"?
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What is a Rate Lock?
A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a specific number of points for you for a certain period of time while your application is processed. This ensures that your interest rate can't grow during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period typically costing more. The lending institution will agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter lock period, there are several ways you can get the best rate. The larger down payment you pay, the lower the rate will be, since you will be starting with more equity. You could opt to pay points to improve your rate for the loan term, meaning you pay more initially. To many people, this makes sense and is a good deal..