What is a "rate lock period"?

What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a certain number of points for you for a specified period during your application process. This ensures that your interest rate won't get higher while you are working through the application process.

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans generally costing more. The lender will agree to hold 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 that of a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a reduced rate, in addition to agreeing to a shorter rate lock period. The bigger down payment you can pay, the lower your rate will be, as you will have more equity from the start. You can pay points to bring down your interest rate over the loan term, meaning you pay more up front. For many people, this makes financial sense..

At Avalon Mortgage Services, Inc., we answer questions about this process every day. Call us at (708) 403-5181.

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