What is a "rate lock period"?

Locking It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate over a certain number of days while you work on your application process. This keeps you from getting through your entire application process and learning at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter period

More Ways to Get a Great Interest Rate

In addition to going with a shorter rate lock period, there are other ways you can score the best rate. The bigger the down payment, the lower the rate will be, since you will be entering the loan with more equity. You can pay points to lower your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the term of the loan. You are paying more initially, but you'll save money, especially if you keep the loan for a long time.

ADVISORY MORTGAGE can walk you through the pitfalls of getting a mortgage. Call us: 8102292820.