What is a "rate lock period"?

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Lock It In

A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest rate and a particular number of points for you for a certain period of time while your application is processed. This prevents you from going through your entire application process and discovering at the end that your interest rate has gotten higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones typically costing more. The lender may agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are more ways to get a reduced rate, in addition to going with a shorter rate lock period. A bigger down payment will give you a reduced interest rate, because you'll have more equity from the beginning. You could opt to pay points to improve your rate over the term of the loan, meaning you pay more up front. For a lot of people, this makes financial sense..

Village Bank Mortgage Corp. can answer questions about rate lock periods and many others. Give us a call: 804-897-1000.