What is a "rate lock period"?
Locking It In
When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a specific interest rate over a determined period while you work on the application process. This saves you from getting through your entire application process and discovering at the end that your interest rate has gotten higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter span of time
Other Interest Saving Strategies
In addition to choosing a shorter rate lock period, there are more ways you may be able to attain the lowest rate. The larger down payment you pay, the better your rate will be, since you will have more equity from the beginning. You may choose to pay points to reduce your rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You pay more initially, but you will save money, especially if you keep the loan for a long time.
Valley Savers Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: (602) 332-9544.
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