What is a "rate lock period"?
Locking It In
A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a specific number of points for you for a certain period during your application process. This saves you from working through your entire application process and discovering at the end that the interest rate has gotten higher.
Although there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
There are other ways to get a reduced rate, besides agreeing to a shorter rate lock period. The larger down payment you can make, the smaller your interest rate will be, because you will be starting with more equity. You can pay points to bring down your rate for the loan term, meaning you pay more initially. To many people, this makes financial sense..
New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Give us a call: (941) 366-5800.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.