What is a "rate lock period"?

Locking It In

When you are offered a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days while you work on your application process. This ensures that your interest rate cannot get higher during the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would have with a shorter period

Other Interest Saving Strategies

In addition to going with the shorter lock period, there are other ways you can get the lowest rate. The more the down payment, the lower your interest rate will be, since you will have more equity from the start. You might opt to pay points to lower your rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

1st Credential Mortgage Inc can answer questions about rate lock periods & many others. Call us: (281) 778-0805.

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