What is a "rate lock period"?
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Lock It In
A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a particular number of points for you for a certain period during your application process. This ensures that your interest rate cannot grow as you are working through the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would with a shorter period
Other Ways to Save on Interest
In addition to going with the shorter lock period, there are more ways you may be able to attain the best rate. The larger down payment you can make, the better your rate will be, since you will have more equity from the start. You might choose to pay points to reduce your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll save money, especially if you keep the loan for a long time.
Mann Mortgage can answer questions about rate lock periods and many others. Give us a call: (808) 264-3715.
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