What is a "rate lock period"?

Locking in your Interest Rate

When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate for a certain number of days while you work on your application process. This protects you from getting through your entire application process and finding out at the end that your interest rate has gotten higher.

While there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. You can get a longer period for your lock, but in doing so, will most likely have a higher interest rate than you would with a shorter period

More Ways to Get a Great Interest Rate

There are other ways to get a low rate, in addition to choosing a shorter rate lock period. The larger down payment you can pay, the smaller your rate will be, since you will have more equity from the beginning. You could choose to pay points to lower your rate over the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the life of the loan. You'll pay more initially, but you'll come out ahead, especially if you don't refinance early.

AmeriBest Mortgage can answer questions about rate lock periods & many others. Give us a call: (321) 777-7277.

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