What is a "rate lock period"?
Lock It In
When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a determined period for your application process. This ensures that your interest rate will not get higher during the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would have with a shorter period
Other Interest Saving Strategies
In addition to going with the shorter lock period, there are several ways you may be able to score the lowest rate. The larger down payment you pay, the smaller the interest rate will be, because you will be starting with more equity. You can pay points to bring down your interest rate over the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will save money in the long run.
At America's Money Source, we answer questions about this process every day. Give us a call at (407) 898-7559.
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