What is a "rate lock period"?

Locking in your Interest Rate

When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a set interest rate over a certain number of days while you work on your application process. This means your interest rate can't rise during the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans usually costing more. The lending institution can agree to lock in 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 choosing the shorter rate lock period, there are more ways you can score the best rate. The larger down payment you can make, the lower the rate will be, since you will have more equity from the start. You can pay points to improve your rate for the life of the loan, meaning you pay more initially. To many people, this is a good option..

Northeast Bancorp of America, Inc. can answer questions about rate lock periods and many others. Call us: (440) 234-9660.

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