What is a "rate lock period"?

Locking in your Interest Rate

When you are promised a "rate lock" from the lender, it means that you are guaranteed to get a particular interest rate for a determined period while you work on your application process. This means your interest rate won't rise during the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. The lending institution can agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a better rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will result in a better interest rate, because you are starting out with more equity. You may opt to pay points to bring down your interest rate for the loan term, meaning you pay more initially. To a lot of people, this makes financial sense..

Secure Mortgage Company can answer questions about rate lock periods and many others. Call us at (713) 667-5472.

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