What is a "rate lock period"?
Freezing the Rate
When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on your application process. This ensures that your interest rate cannot rise during the application process.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lender may agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
Additional Ways to Save on Interest
In addition to opting for the shorter rate lock period, there are more ways you can attain the best rate. A bigger down payment will get you a lower interest rate, since you'll be starting out with a good deal of equity. You might choose to pay points to lower your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you'll come out ahead in the long run.
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can walk you through the pitfalls of getting a mortgage. Give us a call at 214-663-5355.