What is a Rate Lock Period? - Mortgage Experts, Inc.
Looking for a mortgage loan? We'll be glad to discuss our mortgage offerings! Give us a call today at 5036903088. Ready to get started? Apply Here.
A rate "lock" or "commitment" is a promise from the lender to hold a certain interest rate and a specific number of points for you for a specified period of time while your application is processed. This protects you from going through your whole application process and discovering at the end that your interest rate has gone up.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period generally costing more. The lender can agree to freeze an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
There are other ways to get a good rate, besides agreeing to a shorter rate lock period. The larger the down payment, the better your rate will be, because you will be starting with more equity. You might opt to pay points to bring down your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You pay more up front, but you will save money in the long run.
Abacus Mortgage & Loans can walk you through the pitfalls of getting a mortgage. Call us: 5036903088.