What is a "rate lock period"?

Locking in your Interest Rate

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a certain number of days while you work on your application process. This means your interest rate won't get higher during the application process.

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

More Ways to Save on Interest

In addition to going with the shorter rate lock period, there are several ways you may be able to get the best rate. A larger down payment will result in a lower interest rate, because you are starting out with a good deal of equity. You can pay points to lower your interest rate over the life of the loan, meaning you pay more up front. To a lot of people, this makes financial sense..

At Southwest Funding #841, we answer questions about this process every day. Give us a call at (512) 291-6100.

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