What is a "rate lock period"?

Locking It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate for a determined period while you work on your application process. This protects you from getting through your whole application process and learning at the end that your interest rate has risen higher.

Although there might be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lender can agree to hold an interest rate and points for a longer period, like 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 Save on Interest

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

At Lighthouse Mortgage Company, we answer questions about this process every day. Call us at (916) 434-8915.

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