What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a particular number of points for you for a certain period during your application process. This ensures that your interest rate won't get higher during the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans generally costing more. The lending institution may agree to lock in an interest rate and points for a longer span of time, 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 Save on Interest

There are other ways to get a lower rate, in addition to choosing a shorter rate lock period. The bigger down payment you can pay, the better your rate will be, since you will be starting with more equity. You can pay points to lower your rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You will pay more up front, but you will save money, especially if you don't refinance early.

Northeast Bancorp of America, Inc can walk you through the pitfalls of getting a mortgage. Call us: 4402349660.

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Northeast Bancorp of America, Inc

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11925 Pearl Rd
Strongsville, OH 44136