What is a "rate lock period"?

What is a Rate Lock?

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate for a determined period for the application process. This prevents you from getting through your whole application process and learning at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would with a shorter rate lock span of time

More Ways to Get a Great Interest Rate

There are other ways to get a reduced rate, in addition to agreeing to a shorter rate lock period. The larger down payment you make, the smaller your rate will be, because you will have more equity from the start. You can pay points to reduce your interest rate for the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will come out ahead in the long run.

Southwest Funding #841 can walk you through the pitfalls of getting a mortgage. Give us a call at (512) 291-6100.

Mortgage Questions?

Do you have a question regarding a mortgage program?

Contact Information
Your Question

English Spanish