What is a "rate lock period"?

Locking in your Interest Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate for a certain number of days while you work on the application process. This means your interest rate will not get higher during the application process.

While there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. The lender may agree to lock in an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Save on Interest

In addition to going with the shorter rate lock period, there are more ways you can score the best rate. The bigger the down payment, the smaller your interest rate will be, as you will be entering the loan with more equity. You could opt to pay points to lower your rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you keep the loan for the full term.

CHASE MORTGAGE, Inc. #317430 can walk you through the pitfalls of getting a mortgage. Give us a call at 4357556622.