What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a certain number of points for you for a specified period while your application is processed. This keeps you from getting through your entire application process and finding out at the end that the interest rate has gone up.

Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. A lending institution may agree to freeze an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a low rate, in addition to agreeing to a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you'll have more equity at the start. You can pay points to improve your interest rate over the loan term, meaning you pay more initially. For many people, this is a good option..

Amity Mortgage LLC can answer questions about rate lock periods and many others. Give us a call: (203) 729-6681.

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