A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a specific number of points for you for a certain period of time while your application is processed. This saves you from working through your entire application process and discovering at the end that your interest rate has risen higher.
While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would have with a shorter span of time
In addition to opting for the shorter rate lock period, there are more ways you can get the best rate. The larger the down payment, the better the interest rate will be, because you will be entering the loan with more equity. You can pay points to reduce your rate over the life of the loan, meaning you pay more up front. For many people, this makes financial sense..
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.