What is a "rate lock period"?
Locking in your Interest Rate
When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a determined period while you work on your application process. This means your interest rate cannot grow as you are going through the application process.
Although there may be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. 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 span of time
Additional Ways to Save on Interest
There are other ways to get a lower rate, in addition to choosing a shorter rate lock period. The bigger down payment you pay, the lower the rate will be, because you will have more equity from the beginning. You might choose to pay points to improve your interest rate for the term of the loan, meaning you pay more initially. For a lot of people, this is a good option..
Prime Capital Mortgage Corp can answer questions about rate lock periods and many others. Call us: 248-644-1200.
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