What is a "rate lock period"?

Locking It In

When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate for a determined period for your application process. This ensures that your interest rate won't go up during the application process.

Although there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. A lending institution may agree to lock in 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 fewer days.

Other Ways to Save on Interest

There are more ways to get a lower rate, in addition to choosing a shorter rate lock period. A larger down payment will get you a reduced interest rate, because you'll be starting out with a good deal of equity. You can pay points to reduce your interest rate over the term of the loan, meaning you pay more initially. For many people, this is a good option..

Stepping Stone Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 5416833300.