What is a "rate lock period"?
What is a Rate Lock?
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days for the application process. This means your interest rate cannot rise as you are working through the application process.
Although there may be a choice 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 period, like 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a good rate, besides choosing a shorter rate lock period. The larger down payment you can pay, the better the interest rate will be, since you will have more equity from the start. You can pay points to improve your interest rate for the term of the loan, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..
Alternative Mortgage Group can answer questions about rate lock periods & many others. Give us a call: 561-395-4264.