What is a "rate lock period"?

Freezing the Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate for a determined period while you work on your application process. This protects you from going through your whole application process and discovering at the end that your interest rate has gotten higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period typically costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would with a shorter rate lock span of time

Other Ways to Save on Interest

There are more ways to get a lower rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you'll have more equity from the beginning. You might opt to pay points to lower your rate for the life of the loan, meaning you pay more initially. To many people, this makes financial sense..

AAA Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call: 816-272-5550.

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