What is a "rate lock period"?
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Freezing the Rate
When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on your application process. This prevents you from working through your entire application process and finding out at the end that the interest rate has gotten higher.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans typically costing more. The lender will agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
Other Interest Saving Strategies
There are other ways to get a low rate, besides opting for a shorter rate lock period. The bigger down payment you can make, the smaller the interest rate will be, because you will have more equity from the start. You can pay points to lower your interest rate over the loan term, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you keep the loan for a long time.
Accelerated Lending Group can walk you through the pitfalls of getting a mortgage. Give us a call at 661-489-LEND (5363).