What is a "rate lock period"?
Locking It In
When you are offered a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a determined period while you work on the application process. This ensures that your interest rate cannot go up during the application process.
While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A 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 with a rate lock of fewer days.
Other Interest Saving Strategies
There are other ways to get a better rate, in addition to opting for a shorter rate lock period. A larger down payment will get you a reduced interest rate, since you'll have a good amount of equity at the start. You might choose to pay points to lower your interest rate over the life of the loan, meaning you pay more up front. To a lot of people, this makes financial sense..
Universal Lending Services, Inc. can answer questions about rate lock periods and many others. Give us a call at (337) 264-9990.
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