What is a "rate lock period"?
Locking in your Interest Rate
A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a certain number of points for you for a specified period of time during your application process. This protects you from working through your whole application process and learning at the end that your interest rate has gone up.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period generally costing more. The lender can agree to hold an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to going with the shorter rate lock period, there are more ways you can get the best rate. The larger down payment you can pay, the lower the rate will be, because you will have more equity from the beginning. You might opt to pay points to reduce your rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.
Lear Financial Group LLC.
can walk you through the pitfalls of getting a mortgage. Call us: 214-869-7339.