What is a "rate lock period"?
Locking It In
A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a certain number of points for you for a certain period of time while your application is processed. This saves you from getting through your entire application process and finding out at the end that the interest rate has gone up.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter rate lock span of time
Additional Ways to Save on Interest
There are other ways to get a reduced rate, besides opting for a shorter rate lock period. A bigger down payment will get you a reduced interest rate, since you will have more equity from the beginning. You can pay points to reduce your rate for the loan term, meaning you pay more up front. To a lot of people, this makes financial sense..
At Lear Financial Group LLC.
, we answer questions about this process every day. Call us: 214-869-7339.