What is a "rate lock period"?

Lock It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a determined period for the application process. This ensures that your interest rate can't go up as you are working through the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A lending institution may 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 fewer days.

Other Interest Saving Strategies

There are more ways to get a better rate, in addition to choosing a shorter rate lock period. The larger down payment you make, the smaller your interest rate will be, because you will have more equity from the start. You could opt to pay points to improve your rate for the life of the loan, meaning you pay more up front. For many people, this makes financial sense..

Halpern & Associates Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us at (305) 535-2230.

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