What is a "rate lock period"? How can you make sure your rate is low?

A rate lock or a rate commitment is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is being processed. This prevents you from going through your whole application process and at the end of it finding out that the interest rate has gone up.

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, but in exchange the rate and maybe the points will be higher than a shorter rate lock period.

There are many ways besides opting for a shorter rate lock period to get a lower rate.  A larger down payment will result in a lower interest rate as compared to a smaller down payment, because you're starting out with more equity.  You can pay points to lower your rate over the life of the loan, but that means you pay more to begin your loan. For many people this makes sense and is a good deal. We can help you determine the best combinations for your situation.

Closing costs are fees you pay to close your loan. Many people pay closing costs when they sign on the dotted line, but a person may be able to finance some portion or all of their closing costs. Paying closing costs rather than financing them when the loan closes can reduce your interest rate or monthly payment.

Finally, the interest rate a lender is willing to offer you depends on your credit score and your debt-to-income ratio. If you have good credit and your income far exceeds your debt obligations, you will qualify for a lower rate.