What is a "rate lock period"?
Locking It In
When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a determined period for your application process. This saves you from getting through your entire application process and discovering at the end that your interest rate has gone up.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans usually costing more. 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 period
Other Interest Saving Strategies
In addition to going with a shorter lock period, there are several ways you are able to score the best rate. A larger down payment will result in a better interest rate, since you'll be starting out with more equity. You could choose to pay points to improve your rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you'll come out ahead in the long run.
Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Give us a call: (207) 571-8034.