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 get a particular interest rate for a certain number of days while you work on the application process. This means your interest rate cannot go up as you are working through the application process.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones generally 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 span of time
More Ways to Get a Great Interest Rate
There are more ways to get a low rate, in addition to going with a shorter rate lock period. The larger down payment you can pay, the smaller the interest rate will be, as you will be entering the loan with more equity. You can pay points to reduce your interest rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to improve the rate over the life of the loan. You are paying more initially, but you'll come out ahead in the long run.
Pioneer Mortgage Corp can answer questions about rate lock periods and many others. Call us at 781-245-4924.