What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a specific number of points for you for a certain period during your application process. This keeps you from getting through your entire application process and finding out at the end that your interest rate has risen higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter period

More Ways to Save on Interest

In addition to choosing a shorter rate lock period, there are more ways you can get the lowest rate. A bigger down payment will get you a reduced interest rate, since you're starting out with a good deal of equity. You may choose to pay points to lower your interest rate over the term of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You are paying more up front, but you will save money in the long run.

Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Give us a call at 3103737406.

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