What is a "rate lock period"?
Locking It In
When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a determined period for your application process. This protects you from working through your entire application process and learning at the end that the interest rate has risen higher.
While there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher interest rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
There are other ways to get a good rate, besides agreeing to a shorter rate lock period. The bigger down payment you pay, the better your rate will be, as you will have more equity from the start. You might choose to pay points to improve your rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the interest rate over the life of the loan. You will pay more up front, but you'll save money, especially if you don't refinance early.
Trustin Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Give us a call at (302) 765-8089.
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