What is a "rate lock period"?

Locking in your Interest Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a determined period for the application process. This keeps you from working through your whole application process and finding out at the end that your interest rate has risen higher.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period typically costing more. The lending institution 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 with a rate lock of fewer days.

Other Ways to Save on Interest

In addition to opting for a shorter rate lock period, there are other ways you can attain the best rate. A bigger down payment will give you a reduced interest rate, because you will have more equity from the beginning. You can pay points to lower your rate over the term of the loan, meaning you pay more initially. To a lot of people, this makes financial sense..

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (281) 778-0805.