What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a specific number of points for you for a specified period of time during your application process. This protects you from working through your whole application process and learning at the end that the interest rate has gotten higher.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period generally 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 period

More Ways to Get a Great Interest Rate

In addition to going with the shorter lock period, there are more ways you can attain the best rate. A larger down payment will result in a reduced interest rate, because you are starting out with more equity. You can pay points to reduce your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to reduce the rate over the life of the loan. You'll pay more up front, but you'll save money in the long run.

America's Home Loans can answer questions about rate lock periods & many others. Call us at 701.222.0100.

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