What is a "rate lock period"?
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Freezing the Rate
When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate for a determined period for your application process. This means your interest rate won't get higher during the application process.
While there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
There are more ways to get a lower rate, besides agreeing to a shorter rate lock period. The more the down payment, the better your interest rate will be, as you will have more equity from the start. You can pay points to lower your rate over the life of the loan, meaning you pay more up front. To many people, this is a good option.
At Axiom Lending Group, we answer questions about this process every day. Call us at 800-681-1036.