What is a "rate lock period"?

What is a Rate Lock?

When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate over a certain number of days for your application process. This means your interest rate can't grow during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans generally costing more. A lender can agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

More Ways to Save on Interest

There are more ways to get a lower rate, besides opting for a shorter rate lock period. A larger down payment will result in a reduced interest rate, since you'll have more equity at the start. You might opt to pay points to reduce your rate over the life of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to improve the interest rate over the term of the loan. You pay more up front, but you will save money in the long run.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Call us: 2817780805.