"Rate Lock" and other Ways to Get a Lower Interest Rate

What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to freeze a certain interest rate and a specific number of points for you for a certain period of time while your application is processed. This means your interest rate cannot rise while you are working through the application process.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period generally costing more. The lending institution can agree to freeze an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

In addition to choosing the shorter lock period, there are several ways you can score the lowest rate. A larger down payment will get you a reduced interest rate, because you're starting out with a good deal of equity. You may choose to pay points to bring down your interest rate over the term of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the interest rate over the term of the loan. You will pay more up front, but you'll save money in the end.

Hancock Mortgage Partners, LLC NMLS# 229844 can answer questions about rate lock periods and many others. Give us a call: 225 819 7670.