What is a "rate lock period"?

Locking It In

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

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones typically costing more. A lending institution will agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are other ways to get a reduced rate, besides going with a shorter rate lock period. The more the down payment, the lower the rate will be, since you will have more equity from the beginning. You might choose to pay points to improve your interest rate for the loan term, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..

First Southeast Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Give us a call: 954.920.9799.

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