What is a "rate lock period"?

Locking in your Interest Rate

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a determined period for the application process. This keeps you from working through your entire application process and learning at the end that your interest rate has gone up.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period typically costing more. The lender may agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Additional Ways to Save on Interest

In addition to opting for the shorter rate lock period, there are several ways you are able to score the lowest rate. The larger down payment you pay, the smaller your rate will be, as you will be entering the loan with more equity. You might choose to pay points to reduce your interest rate for the loan term, meaning you pay more initially. To a lot of people, this is a good option..

Bright Vision Mortgage can answer questions about rate lock periods and many others. Give us a call: 9043423622.

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