What is a "rate lock period"?
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What is a Rate Lock?
A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a particular number of points for you for a specified period while your application is processed. This ensures that your interest rate won't go up during the application process.
While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
In addition to choosing the shorter lock period, there are more ways you may be able to score the lowest rate. The bigger the down payment, the lower the interest rate will be, as you will be entering the loan with more equity. You can pay points to lower your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for some 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, especially if you don't refinance early.
At Synergistic Wealth Management llc, we answer questions about this process every day. Give us a call: 480-282-3662.