What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a certain number of points for you for a certain period of time during your application process. This saves you from getting through your whole application process and finding out at the end that your interest rate has risen higher.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter rate lock period

Other Interest Saving Strategies

There are other ways to get a good rate, besides choosing a shorter rate lock period. The bigger the down payment, the better your interest rate will be, as you will be entering the loan with more equity. You might choose to 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 in the end.

At Forum Mortgage Bancorp, we answer questions about this process every day. Call us at (773) 774-9040 Ext 121.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question
By checking the box, you agree that Forum Mortgage Bancorp may call/text you about your inquiry, which may involve use of automated means and prerecorded/artificial voices.. Message/data rates may apply.