What is a "rate lock period"?
What is a Rate Lock?
When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days for your application process. This means your interest rate won't grow as you are going through the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lender can agree to hold an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are more ways to get a low rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you'll have more equity from the beginning. You can pay points to improve your interest rate for the loan term, meaning you pay more up front. To many people, this makes financial sense..
At Cal Coast Financial Corp, we answer questions about this process every day. Call us: (510) 683-9850.
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