What is a "rate lock period"?

Locking It In

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate over a determined period for your application process. This prevents you from getting through your entire application process and discovering at the end that your interest rate has risen higher.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would with a shorter rate lock period

Other Interest Saving Strategies

There are other ways to get a lower rate, in addition to agreeing to a shorter rate lock period. The larger the down payment, the smaller the rate will be, because you will be starting with more equity. You can pay points to improve your interest rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll come out ahead, especially if you keep the loan for a long time.

At Northeast Bancorp of America, Inc., we answer questions about this process every day. Call us: (440) 234-9660.

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