What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a particular number of points for you for a certain period of time during your application process. This means your interest rate won't rise while you are working through the application process.

Although there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. The lender may agree to hold an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to going with a shorter rate lock period, there are other ways you can attain the best rate. A larger down payment will give you a lower interest rate, since you'll be starting out with a good deal of equity. You can pay points to lower your interest rate over the term of the loan, meaning you pay more up front. To many people, this is a good option..

Norcal Capital Group, Inc can walk you through the pitfalls of getting a mortgage. Give us a call at (650) 689-5684.

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