What is a "rate lock period"?

Freezing the Rate

When you are offered a "rate lock" from your lender, it means that you are guaranteed to keep a certain interest rate for a determined period for the application process. This keeps you from working through your entire application process and discovering at the end that your interest rate has gone up.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lender may agree to hold an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to going with a shorter rate lock period, there are more ways you can get the best rate. A larger down payment will result in a lower interest rate, since you're starting out with more equity. You may opt to pay points to lower your rate for the life of the loan, meaning you pay more up front. To a lot of people, this is a good option..

FirstSouth Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 972-279-3700.

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