What is a "rate lock period"?

What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to freeze a certain interest rate and a specific number of points for you for a certain period of time while your application is processed. This means your interest rate cannot grow while you are working through the application process.

While there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. A lending institution will 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 that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a lower rate, besides choosing a shorter rate lock period. The more the down payment, the smaller your rate will be, since you will have more equity from the start. You might choose to pay points to bring down your interest rate for the life of the loan, meaning you pay more initially. For many people, this is a good option..

At Hawk Mortgage Group, we answer questions about this process every day. Give us a call at (443) 619-7900.

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