What is a "rate lock period"?

Locking It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a determined period for the application process. This protects you from working through your entire application process and discovering at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period typically costing more. The lender may agree to lock in an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to choosing a shorter rate lock period, there are several ways you can attain the lowest rate. A bigger down payment will result in a reduced interest rate, since you will be starting out with a good deal of equity. You can pay points to lower your rate for the life of the loan, meaning you pay more initially. For many people, this makes financial sense..

Diamond Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: 3178427744.