What is a "rate lock period"?
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Locking in your Interest Rate
When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate over a certain number of days while you work on your application process. This prevents you from going through your entire application process and learning at the end that the interest rate has risen higher.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter rate lock span of time
Other Ways to Save on Interest
In addition to opting for the shorter rate lock period, there are other ways you are able to score the lowest rate. A bigger down payment will get you a better interest rate, since you are starting out with more equity. You may choose to pay points to lower your rate for 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 reduce the rate over the term of the loan. You'll pay more up front, but you'll come out ahead in the end.
Award Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us: 619-857-2273.