What is a "rate lock period"?

Freezing the Rate

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 of time while your application is processed. This prevents you from getting through your whole application process and finding out at the end that your interest rate has gotten higher.

Although there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. The lender will agree to hold an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to going with the shorter lock period, there are other ways you can score the best rate. A larger down payment will get you a lower interest rate, since you will have a good amount of equity at the start. You might choose to pay points to bring down your interest rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will come out ahead, especially if you keep the loan for a long time.

Augusta Mortgage Solutions can answer questions about rate lock periods and many others. Call us at 7068605514.

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Augusta Mortgage Solutions

NMLS#:148529 GA Residential Mortgage Licensee #18861

141 North Belair Road Suite 102 NMLS# 149807
Evans, GA 30809-7431