What is a "rate lock period"?

Locking in your Interest Rate

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

Although there may be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. The lender may agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a good rate, besides opting for a shorter rate lock period. A larger down payment will result in a lower interest rate, since you are starting out with more equity. You might opt to pay points to lower your interest rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You will pay more initially, but you will come out ahead in the end.

1st Credential Mortgage Inc can answer questions about rate lock periods & many others. Give us a call at (281) 778-0805.

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