What is a "rate lock period"?
Freezing the Rate
A rate "lock" or "commitment" is a promise from the lender to set a particular interest rate and a certain number of points for you for a certain period of time while your application is processed. This means your interest rate will not rise during the application process.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would have with a shorter rate lock span of time
More Ways to Save on Interest
In addition to choosing the shorter lock period, there are more ways you can attain the best rate. The bigger down payment you can make, the lower your interest rate will be, since you will have more equity from the start. You can pay points to bring down your interest rate over the loan term, meaning you pay more initially. For many people, this is a good option..
At Pioneer Mortgage Corp, we answer questions about this process every day. Give us a call at 781-245-4924.