What is a "rate lock period"?
What is a Rate Lock?
When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a particular interest rate for a certain number of days for your application process. This saves you from going through your whole application process and discovering at the end that the interest rate has gone up.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lender may 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 more than that of a rate lock of fewer days.
Other Interest Saving Strategies
There are other ways to get a low rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the smaller your rate will be, as you will be starting with more equity. You might opt to pay points to bring down your rate over the term of the loan, meaning you pay more up front. For a lot of people, this is a good option..
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Give us a call: (808) 935-0678.
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