What is a "rate lock period"?
Locking It In
When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate over a certain number of days for the application process. This means your interest rate will not rise during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period generally costing more. A lending institution may agree to hold an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are more ways to get a good rate, in addition to agreeing to a shorter rate lock period. The more the down payment, the better the rate will be, as you will be starting with more equity. You may choose to pay points to improve your rate over the life of the loan, meaning you pay more up front. For a lot of people, this makes financial sense..
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can walk you through the pitfalls of getting a mortgage. Call us: 214-663-5355.