What is a "rate lock period"?

Lock It In

A rate "lock" or "commitment" is a lender's promise to set a specific interest rate and a certain number of points for you for a specified period of time during your application process. This means your interest rate can't grow during the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer ones generally costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would have with a shorter rate lock period

More Ways to Save on Interest

There are other ways to get a low rate, besides opting for a shorter rate lock period. The larger down payment you can pay, the lower your interest rate will be, since you will be entering the loan with more equity. You can pay points to reduce your rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You are paying more up front, but you'll come out ahead, especially if you keep the loan for the full term.

At Baywide Funding Corporation, we answer questions about this process every day. Give us a call at 650 428 0234.