What is a "rate lock period"?
Freezing the Rate
When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate for a certain number of days while you work on your application process. This ensures that your interest rate will not go up while you are going through the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter rate lock span of time
More Ways to Get a Great Interest Rate
There are other ways to get a reduced rate, besides going with a shorter rate lock period. The bigger down payment you make, the lower the rate will be, since you will have more equity from the start. You can pay points to reduce your rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the interest rate over the life of the loan. You are paying more up front, but you'll come out ahead in the end.
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about rate lock periods & many others. Call us: 214-663-5355.