What is a "rate lock period"?
Locking It In
When you are offered a "rate lock" from a 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 won't grow as you are working through the application process.
While there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. The lending institution will agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter lock period, there are more ways you can score the lowest rate. The bigger down payment you can pay, the better the rate will be, because you will have more equity from the start. You may opt to pay points to lower your interest rate for the loan term, meaning you pay more initially. To many people, this makes sense and is a good deal..
Contemporary Mortgage Services, Inc can answer questions about rate lock periods and many others. Give us a call at 407-834-3377.
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