What is a "rate lock period"?
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Locking It In
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate for a determined period for the application process. This saves you from going through your whole application process and discovering at the end that your interest rate has risen higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones usually costing more. A lender can agree to freeze an interest rate and points for a longer period, 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.
More Ways to Get a Great Interest Rate
In addition to going with a shorter lock period, there are other ways you can attain the lowest rate. The larger down payment you can pay, the lower the interest rate will be, since you will be starting with more equity. You might opt to pay points to improve your rate over the loan term, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..
Keypoint Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 201-998-9050.
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