What is a "rate lock period"?
Lock It In
When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a determined period while you work on the application process. This saves you from going through your whole application process and finding out at the end that your interest rate has gotten higher.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lending institution will agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
Other Ways to Save on Interest
In addition to opting for a shorter rate lock period, there are several ways you may be able to score the lowest rate. The larger down payment you can make, the lower the rate will be, because you will have more equity from the beginning. You can pay points to improve your rate for the loan term, meaning you pay more initially. For a lot of people, this makes financial sense..
Ward Kilduff Mortgage can answer questions about rate lock periods and many others. Call us at (860) 658-7100.
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