What is a "rate lock period"?
What is a Rate Lock?
A rate "lock" or "commitment" is a promise from the lender to set a certain interest rate and a particular number of points for you for a specified period of time during your application process. This ensures that your interest rate won't rise while you are working through the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would 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. The larger down payment you can make, the better your rate will be, as you will have more equity from the beginning. You may opt to pay points to reduce your rate over the loan term, meaning you pay more initially. For many people, this is a good option..
At Cal Coast Financial Corp, we answer questions about this process every day. Call us: (510) 683-9850.
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