What is a "rate lock period"?

What is a Rate Lock?

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

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

Other Interest Saving Strategies

There are other ways to get a good rate, in addition to choosing a shorter rate lock period. A larger down payment will give you a lower interest rate, since you'll have a good deal of equity from the beginning. You may opt to pay points to improve your interest rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense 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 save money in the end.

Omni Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us: 7184417000.

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