What is a "rate lock period"?
Lock It In
A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a specific number of points for you for a certain period of time during your application process. This protects you from going through your entire application process and finding out at the end that the interest rate has risen higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lending institution can 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 a shorter period.
Additional Ways to Save on Interest
There are more ways to get a lower rate, in addition to going with a shorter rate lock period. The larger down payment you can make, the lower the rate will be, because you will have more equity from the beginning. You might opt to pay points to improve your interest rate for the loan term, meaning you pay more up front. To many 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: 2146635355.