What is a "rate lock period"?
Lock It In
A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a specific number of points for you for a specified period of time during your application process. This prevents you from going through your entire application process and learning at the end that the interest rate has gotten higher.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period typically costing more. A lender can agree to lock in an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are more ways to get a low rate, besides going with a shorter rate lock period. A bigger down payment will result in a lower interest rate, because you're starting out with more equity. You could opt to pay points to lower your rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will save money in the long run.
Washingtonian Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call at 4433365525.