What is a "rate lock period"?
Locking in your Interest Rate
A rate "lock" or "commitment" is a promise from the lender to set a certain interest rate and a certain number of points for you for a certain period of time during your application process. This prevents you from getting through your entire application process and discovering at the end that the interest rate has gone up.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter period
More Ways to Get a Great Interest Rate
In addition to opting for the shorter rate lock period, there are several ways you can score the lowest rate. The bigger the down payment, the lower the rate will be, since you will have more equity from the start. You may choose to pay points to improve your interest rate over the life 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. Call us: 504-866-5626.
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