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What is a "rate lock period"?

What is a Rate Lock?

When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days for your application process. This prevents you from getting through your whole application process and discovering at the end that the interest rate has risen higher.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would with a shorter period

Other Interest Saving Strategies

In addition to choosing a shorter rate lock period, there are more ways you can attain the best rate. The larger down payment you make, the better the interest rate will be, as you will have more equity from the beginning. You might choose to pay points to lower your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You are paying more up front, but you will come out ahead, especially if you keep the loan for a long time.

Commonwealth Mortgage & Investments, Inc. can walk you through the pitfalls of getting a mortgage. Call us at 804-768-9519.