What is a "rate lock period"?

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Lock It In

When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate over a determined period while you work on your application process. This keeps you from getting through your entire application process and finding out at the end that the interest rate has gotten higher.

While there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. A lending institution can agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to choosing the shorter rate lock period, there are several ways you can score the best rate. The larger down payment you can make, the lower your interest rate will be, because you will be starting with more equity. You might opt to pay points to bring down your rate over the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the term of the loan. You will pay more initially, but you'll come out ahead in the long run.

Livingston Lending can answer questions about rate lock periods & many others. Call us at 8102296669.