What is a "rate lock period"?

Locking It In

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

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period usually costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter rate lock span of time

Other Interest Saving Strategies

There are more ways to get a low rate, besides opting for a shorter rate lock period. The bigger the down payment, the better the interest rate will be, since you will be entering the loan with more equity. You might opt to pay points to bring down your rate for the term of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to reduce the rate over the term of the loan. You pay more up front, but you will save money, especially if you don't refinance early.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about rate lock periods & many others. Call us: (808) 935-0678.