What is a "rate lock period"?
Lock It In
When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on the application process. This ensures that your interest rate won't get higher during the application process.
Although there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would with a shorter period
Other Interest Saving Strategies
There are other ways to get a good rate, in addition to choosing a shorter rate lock period. The bigger down payment you pay, the smaller the rate will be, because you will have more equity from the start. You can pay points to bring down 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 reduce the interest rate over the term of the loan. You will pay more initially, but you'll come out ahead in the end.
At Executive Lending Group, LLC, we answer questions about this process every day. Call us: (816) 525-8000.
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