What is a "rate lock period"?

Locking in your Interest Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate for a certain number of days for the application process. This saves you from getting through your entire application process and discovering at the end that your interest rate has gotten higher.

Although there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. A lender can agree to lock in an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Other Ways to Save on Interest

There are more ways to get a good rate, in addition to choosing a shorter rate lock period. A larger down payment will give you a better interest rate, since you'll have a good amount of equity at the start. You can pay points to lower your interest rate for the life of the loan, meaning you pay more up front. For a lot of people, this is a good option..

MidTowne Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (478) 746-2063.

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