What is a "rate lock period"?

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What is a Rate Lock?

When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a determined period for your application process. This ensures that your interest rate will not go up during the application process.

While there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. A lending institution will agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

More Ways to Save on Interest

In addition to opting for the shorter lock period, there are more ways you may be able to attain the best rate. A bigger down payment will result in a lower interest rate, since you'll be starting out with more equity. You can pay points to bring down your rate over the loan term, meaning you pay more up front. For a lot of people, this makes financial sense..

At FNB Town Square Mortgage, we answer questions about this process every day. Give us a call at (817) 821-5179.