What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a certain number of points for you for a specified period during your application process. This saves you from going through your whole application process and discovering at the end that your interest rate has gotten higher.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter period

More Ways to Get a Great Interest Rate

In addition to choosing the shorter lock period, there are several ways you are able to score the best rate. A bigger down payment will get you a better interest rate, because you'll have a good amount of equity from the beginning. 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 pay more initially, but you'll save money in the long run.

At Chris Caggiano - Grand Oaks Funding, LLC, we answer questions about this process every day. Give us a call at (718) 477-4405.

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