What is a "rate lock period"?

Locking in your Interest Rate

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a certain number of days for the application process. This protects you from going through your entire application process and finding out at the end that the interest rate has gotten higher.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period typically costing more. The lender may agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a better rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will get you a reduced interest rate, because you are starting out with more equity. You can pay points to bring down your rate for the loan term, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..

Riviera Funding can walk you through the pitfalls of getting a mortgage. Give us a call at (310) 373-7406.

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