What is a "rate lock period"?
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Locking in your Interest Rate
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 certain period of time while your application is processed. This protects you from getting through your whole application process and discovering at the end that the interest rate has risen higher.
Although there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. A lending institution may agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a low rate, besides going with a shorter rate lock period. The bigger down payment you can make, the better the interest rate will be, as you will have more equity from the beginning. You can pay points to reduce your rate for the loan term, meaning you pay more initially. For a lot of people, this makes financial sense.
Eagle Platinum Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (888) 496-8704.
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