What is a "rate lock period"?
What is a Rate Lock?
When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a certain number of days for the application process. This protects you from going through your whole application process and finding out at the end that your interest rate has gone up.
Rate lock periods can vary in length, between 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher rate than you would have with a shorter span of time
Other Ways to Save on Interest
There are more ways to get a reduced rate, besides choosing a shorter rate lock period. The bigger down payment you make, the better your rate will be, since you will have more equity from the start. You can pay points to bring down your interest rate for the loan term, meaning you pay more up front. 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 will pay more up front, but you'll come out ahead in the end.
America's Money Source can answer questions about rate lock periods & many others. Give us a call at (407) 898-7559.
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