What is a "rate lock period"?
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Locking in your Interest Rate
When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate over a determined period while you work on your application process. This prevents you from getting through your whole application process and learning at the end that your interest rate has gone up.
While there can be a choice of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. A lending institution can agree to hold an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
Additional Ways to Save on Interest
There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. A larger down payment will result in a reduced interest rate, since you will be starting out with more equity. You might choose to pay points to improve your interest rate for the loan term, meaning you pay more up front. To a lot of people, this is a good option..
At Executive Lending Group, we answer questions about this process every day. Give us a call: (405) 822-1957.