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 particular interest rate for a certain number of days for the application process. This ensures that your interest rate cannot go up during the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would have with a shorter period
More Ways to Get a Great Interest Rate
There are other ways to get a better rate, besides going with a shorter rate lock period. The larger down payment you can make, the lower the rate will be, as you will be starting with more equity. You can pay points to reduce your interest rate for the life of the loan, 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 life of the loan. You'll pay more initially, but you'll save money in the long run.
Pioneer Mortgage Corp can walk you through the pitfalls of getting a mortgage. Give us a call at 781-245-4924.