What is a "rate lock period"?

What is a Rate Lock?

When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a certain number of days while you work on the application process. This protects you from getting through your whole application process and discovering at the end that the interest rate has risen higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lending institution will agree to hold 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.

More Ways to Get a Great Interest Rate

In addition to opting for the shorter rate lock period, there are other ways you may be able to get the best rate. A larger down payment will give you a reduced interest rate, since you'll have more equity from the beginning. You can pay points to lower your rate over the loan term, meaning you pay more up front. To many people, this is a good option..

Hawk Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us at (443) 619-7900.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question