What is a "rate lock period"?
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to lock in a specific interest rate and a particular number of points for you for a certain period while your application is processed. This keeps you from getting through your entire application process and learning at the end that your interest rate has gone up.
Rate lock periods can vary in length, between 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 probably have a higher interest rate than you would have with a shorter rate lock period
Other Interest Saving Strategies
In addition to going with a shorter rate lock period, there are more ways you can attain the best rate. The larger the down payment, the lower the rate will be, as you will be entering the loan with more equity. You can pay points to improve your interest rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You'll pay more initially, but you'll come out ahead in the end.
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us: 561-395-4264.