What is a "rate lock period"?
Freezing the Rate
When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate over a determined period while you work on the application process. This means your interest rate cannot go up as you are going through the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would have with a shorter period
Other Interest Saving Strategies
In addition to going with the shorter lock period, there are other ways you can attain the best rate. A bigger down payment will give you a lower interest rate, because you are starting out with a good deal of equity. You can pay points to bring down your interest rate for the loan term, meaning you pay more initially. For a lot of people, this makes financial sense..
Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods & many others. Give us a call at (207) 571-8034.