What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest rate and a particular number of points for you for a certain period during your application process. This ensures that your interest rate will not rise as you are going through the application process.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period typically costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would with a shorter span of time

Other Interest Saving Strategies

In addition to choosing a shorter lock period, there are other ways you may be able to get the lowest rate. A larger down payment will result in a better interest rate, because you'll have a good amount of equity from the beginning. You can pay points to bring down your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you keep the loan for the full term.

Stepping Stone Mortgage can answer questions about rate lock periods and many others. Call us at (541) 683-3300.

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