What is a "rate lock period"?
Freezing the Rate
When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a certain number of days while you work on the application process. This ensures that your interest rate will not grow as you are going through the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would with a shorter period
Additional Ways to Save on Interest
In addition to choosing a shorter rate lock period, there are other ways you can score the best rate. A bigger down payment will get you a lower interest rate, because you will be starting out with more equity. You might choose to pay points to reduce your interest rate over the term of the loan, meaning you pay more initially. To many people, this is a good option..
At Coastal Mortgage Corp., we answer questions about this process every day. Give us a call: 504-866-5626.
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