What is a "rate lock period"?
Lock It In
A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a particular number of points for you for a certain period while your application is processed. This ensures that your interest rate won't go up during the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. A lender may agree to freeze an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are more ways to get a low rate, in addition to choosing a shorter rate lock period. The bigger the down payment, the better your rate will be, as 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 is a good option for some is to pay points to improve the rate over the life of the loan. You'll pay more up front, but you'll come out ahead, especially if you keep the loan for the full term.
America's Money Source can walk you through the pitfalls of getting a mortgage. Give us a call at (407) 898-7559.
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