What is a "rate lock period"?

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Lock It In

When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a set interest rate for a determined period for your application process. This means your interest rate won't get higher as you are going through the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. A lending institution will agree to lock in an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a better rate, besides going with a shorter rate lock period. The larger down payment you make, the lower your rate will be, since you will have more equity from the start. You can pay points to improve your interest rate over the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You'll pay more initially, but you'll save money, especially if you don't refinance early.

Gateway Mortgage Denver can answer questions about rate lock periods & many others. Give us a call at 720-440-9741.