What is a "rate lock period"?

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Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a specific number of points for you for a certain period of time while your application is processed. This ensures that your interest rate can't rise during the application process.

Although there may be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter span of time

Other Interest Saving Strategies

In addition to going with a shorter rate lock period, there are more ways you are able to score the lowest rate. A bigger down payment will result in a lower interest rate, since you will have more equity from the beginning. You can pay points to lower your rate for the life of the loan, meaning you pay more initially. To many people, this makes sense and is a good deal..

MHQ Financial Services can answer questions about rate lock periods and many others. Call us at 573-302-9990.