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 set interest rate for a certain number of days while you work on your application process. This ensures that your interest rate can't grow while you are working through the application process.
Although there might be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. The lender can agree to lock in an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
Other Interest Saving Strategies
In addition to choosing the shorter rate lock period, there are several ways you may be able to get the lowest rate. The larger down payment you pay, the better the rate will be, since you will have more equity from the start. You can pay points to lower your rate over 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 improve the rate over the term of the loan. You'll pay more up front, but you will save money in the long run.
Savers Home Loans can answer questions about rate lock periods & many others. Give us a call at (800) 974-0509.