What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a specific number of points for you for a certain period of time while your application is processed. This keeps you from going through your whole application process and finding out at the end that your interest rate has gotten higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A lender may agree to hold an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to choosing the shorter rate lock period, there are several ways you can score the best rate. The larger down payment you can make, the smaller your rate will be, as you will have more equity from the beginning. You can pay points to lower your interest rate for the term of the loan, meaning you pay more up front. To a lot of people, this is a good option..

Arizona Wholesale Mortgage Inc. can answer questions about rate lock periods and many others. Give us a call at 6233400934.

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