What is a "rate lock period"?
Freezing the Rate
When you are promised a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate for a determined period for the application process. This ensures that your interest rate will not go up as you are working through the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans typically costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would with a shorter span of time
More Ways to Save on Interest
In addition to going with a shorter rate lock period, there are more ways you may be able to attain the lowest rate. The larger down payment you can pay, the lower your rate will be, as you will have more equity from the start. You can pay points to improve your interest rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the rate over the life of the loan. You'll pay more up front, but you'll come out ahead in the long run.
New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Give us a call at (941) 366-5800.
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