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 for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and at the end of it finding out the interest rate has gone up.
A rate lock period can vary in length, but most rate locks are usually 60 days for any apartment loan program. Each program will outline the cost of the rate lock on the “Loan Cost” page. Some of the costs are refundable upon the closing of the loan, others are non-refundable. When a rate is locked in, even if interest rates still go down, you will receive the interest rate that was locked in. On the other hand, even if rates go up substantially, you still will receive the interest rate that was locked in.