What is a "rate lock period"?
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a particular number of points for you for a specified period while your application is processed. This ensures that your interest rate cannot get higher while you are working through the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution can agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to going with a shorter rate lock period, there are several ways you may be able to score the lowest rate. A larger down payment will result in a better interest rate, because you are starting out with a good deal of equity. You might opt to pay points to reduce your rate over the loan term, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 504-866-5626.
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