What is a "rate lock period"?
Freezing the Rate
When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a determined period while you work on the application process. This prevents you from going through your whole application process and discovering at the end that your interest rate has risen higher.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
In addition to choosing a shorter lock period, there are other ways you can attain the lowest rate. A bigger down payment will result in a lower interest rate, since you are starting out with a good deal of equity. You could opt to pay points to reduce your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.
Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods & many others. Call us at (207) 571-8034.