What is a "rate lock period"?
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Locking in your Interest Rate
When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate over a certain number of days while you work on the application process. This ensures that your interest rate cannot rise during the application process.
Although there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A lender may agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to opting for the shorter rate lock period, there are several ways you can attain the best rate. The larger down payment you can make, the better your interest rate will be, since you will be entering the loan with more equity. You might opt to pay points to reduce your rate over the loan term, meaning you pay more up front. To a lot of people, this makes financial sense..
County-City Credit Union can answer questions about rate lock periods and many others. Give us a call at (920) 674-5542.