What is a "rate lock period"?

Freezing the Rate

When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on the application process. This protects you from working through your entire application process and finding out at the end that the interest rate has gotten higher.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would have with a shorter rate lock span of time

Other Interest Saving Strategies

In addition to choosing the shorter lock period, there are more ways you can get the best rate. A larger down payment will give you a better interest rate, because you will have a good amount of equity at the start. You could opt to pay points to reduce your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will save money, especially if you keep the loan for the full term.

New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Call us: (941) 366-5800.