What is a "rate lock period"?
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Lock It In
When you're promised a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate for a determined period for your application process. This ensures that your interest rate can't get higher during the application process.
While there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. The lender can agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
Other Ways to Save on Interest
In addition to going with the shorter rate lock period, there are other ways you can attain the lowest rate. The bigger down payment you can pay, the better the interest rate will be, as you will be starting with more equity. You might choose to pay points to bring down your rate over the loan term, meaning you pay more initially. For many people, this is a good option..
Bay Area Capital Funding . can answer questions about rate lock periods and many others. Give us a call: (650) 631-1800.
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