What is a "rate lock period"?

Freezing the Rate

When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate for a determined period for the application process. This keeps you from working through your entire application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans usually costing more. The lender can agree to hold an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a good rate, besides agreeing to a shorter rate lock period. The bigger the down payment, the smaller the interest rate will be, since you will be starting with more equity. You could choose to pay points to reduce your rate for the loan term, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..

Pioneer Mortgage Corp can walk you through the pitfalls of getting a mortgage. Call us at 7812454924.