What is a "rate lock period"?

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to freeze a specific interest rate and a certain number of points for you for a specified period during your application process. This means your interest rate cannot go up as you are going through the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution can agree to lock in an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are more ways to get a better rate, besides opting for a shorter rate lock period. A larger down payment will result in a reduced interest rate, since you are starting out with a good deal of equity. You can pay points to reduce your interest rate for the loan term, meaning you pay more up front. To a lot of people, this is a good option..

At Riviera Funding NMLS#861382 CA DRE Broker #01186669, we answer questions about this process every day. Call us: 3103737406.

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