Q. What is a “Rate Lock Period”?
A rate lock or a rate commitment is a lender’s promise to hold a specified interest rate and a certain number of points for you for a limited period of time while your application is being processed. This prevents you from going through the whole application process and at the end finding out the interest rate has increased.
Q. How long is my rate locked in for?
Typically your interest rate is locked in for a certain number of days. A rate lock period can vary in length, and longer ones usually cost more. A lender will agree to “hold” your interest rate and points for a longer period, say 60 days. In exchange the rate and maybe points are higher than with a shorter rate lock period, for example 3-45 days. Your Mortgage Professional can help determine if you need a longer rate lock period than the normal 30-45 days.