What is a "rate lock period"?
Locking It In
When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate for a certain number of days for your application process. This keeps you from going through your whole application process and learning at the end that your interest rate has gone up.
Although there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. A lending institution may agree to lock in an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
Additional Ways to Save on Interest
There are more ways to get a reduced rate, besides agreeing to a shorter rate lock period. The bigger down payment you can make, the smaller the interest rate will be, as you will be entering the loan with more equity. You can pay points to improve your interest rate over the life of the loan, meaning you pay more initially. For many people, this makes financial sense..
Financial Edge Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us at 425-508-9988.
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