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 specific interest rate and a specific number of points for you for a specified period during your application process. This keeps you from going through your whole application process and discovering at the end that the interest rate has gotten higher.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. The lending institution can agree to hold an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
Other Ways to Save on Interest
There are other ways to get a reduced rate, besides going with a shorter rate lock period. The larger the down payment, the smaller your interest rate will be, because you will be entering the loan with more equity. You might choose to pay points to reduce your interest rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You pay more initially, but you will come out ahead in the long run.
Washingtonian Mortgage, LLC can answer questions about rate lock periods & many others. Give us a call: 410-451-2755.