What is a "rate lock period"?
Locking It In
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days for your application process. This means your interest rate won't rise while you are going through the application process.
Rate lock periods can be various lengths of time, between 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 rate than you would with a shorter rate lock period
Other Interest Saving Strategies
There are other ways to get a low rate, in addition to agreeing to a shorter rate lock period. The bigger down payment you can make, the lower your interest 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 life of the loan, meaning you pay more up front. To many people, this makes sense and is a good deal..
At Cal Coast Financial Corp, we answer questions about this process every day. Give us a call: (510) 683-9850.
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