What is a "rate lock period"?
Locking It In
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days for the application process. This means your interest rate can't get higher 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 period usually costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would have with a shorter rate lock period
Other Interest Saving Strategies
There are more ways to get a low rate, in addition to opting for a shorter rate lock period. The bigger the down payment, the lower the interest rate will be, because you will be starting with more equity. You can pay points to improve your interest rate for the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you don't refinance early.
Contemporary Mortgage Services, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 407-834-3377.
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