What is a "rate lock period"?

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Freezing the Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a determined period while you work on the application process. This ensures that your interest rate won't rise during the application process.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones usually costing more. You can get a longer period for your lock, but in doing so, will likely have a higher interest rate than you would with a shorter rate lock span of time

Additional Ways to Save on Interest

In addition to opting for the shorter rate lock period, there are other ways you can get the best rate. The bigger the down payment, the smaller the rate will be, since you will have more equity from the start. You can pay points to reduce your rate over the term of the loan, meaning you pay more up front. For many people, this makes sense and is a good deal..

At Innovative Home Loans, LLC, we answer questions about this process every day. Give us a call: (859) 240-1231.