What is a "rate lock period"?

Lock It In

A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a specific number of points for you for a specified period of time while your application is processed. This means your interest rate will not go up while you are going through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period typically costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would have with a shorter rate lock period

More Ways to Save on Interest

There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the smaller your rate will be, because you will have more equity from the start. You can pay points to improve your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You are paying more up front, but you will save money in the end.

At Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655, we answer questions about this process every day. Give us a call at (203) 526-9345.

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