What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a specific number of points for you for a specified period of time while your application is processed. This ensures that your interest rate can't rise as you are working through the application process.

Although there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lender will agree to hold an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a lower rate, besides agreeing to a shorter rate lock period. The more the down payment, the better the interest rate will be, as you will have more equity from the beginning. You might choose to pay points to improve your interest rate over the term of the loan, meaning you pay more initially. To many people, this makes sense and is a good deal..

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

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