What is a "rate lock period"?

Locking in your Interest Rate

When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate for a determined period for your application process. This protects you from going through your entire application process and learning at the end that the interest rate has gone up.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lender will 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 fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a reduced rate, besides going with a shorter rate lock period. A larger down payment will get you a better interest rate, since you'll be starting out with a good deal of equity. You can pay points to reduce your interest rate over the term of the loan, meaning you pay more up front. For many people, this makes sense and is a good deal..

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

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