What is a "rate lock period"?

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a certain number of points for you for a specified period while your application is processed. This saves you from working through your whole application process and finding out at the end that your interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period usually costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would have with a shorter rate lock period

Other Interest Saving Strategies

There are other ways to get a better rate, besides agreeing to a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you'll be starting out with a good deal of equity. You can pay points to reduce your rate for the term of the loan, meaning you pay more initially. For many people, this makes financial sense..

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

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