What is a "rate lock period"?
What is a Rate Lock?
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate for a determined period for the application process. This keeps you from going through your whole application process and discovering at the end that the interest rate has risen higher.
Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lender can agree to hold an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter rate lock period, there are other ways you can get the lowest rate. The larger the down payment, the lower your rate will be, since you will be entering the loan with more equity. You can pay points to improve your rate over the life of the loan, meaning you pay more initially. To many people, this makes financial sense..
At Carter Financial Solutions, we answer questions about this process every day. Give us a call: 8668408745.