WHAT IS A "RATE LOCK PERIOD"?

A "rate lock" or a rate commitment is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and at the end of it finding out the interest rate has gone up.

A rate lock period can vary in length, and longer ones usually cost more. A lender will agree to "hold" your interest rate and points for a longer period, say 60 days, but in exchange the rate and maybe points are higher than with a shorter rate lock period, for example. Typical rate locks are in the range of 30 to 45 days, but you may need a longer lock period in order to satisfy your needs or the seller's requirements.

There are many ways besides opting for a shorter rate lock period to get a lower rate, though. You can pay points to lower your rate over the life of the loan, but that means you pay more up front. For many people, this makes sense and is a good deal. We can help you decide.