"Rate Lock" and other Ways to Get a Lower Interest Rate

Locking in your Interest Rate

When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days while you work on the application process. This ensures that your interest rate can't go up while you are working through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period generally costing more. A lending institution can agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Other Ways to Save on Interest

In addition to opting for a shorter lock period, there are more ways you are able to score the best rate. The bigger down payment you make, the smaller your rate will be, since you will have more equity from the beginning. You can pay points to improve your interest rate over the loan term, meaning you pay more up front. To many people, this makes financial sense..

Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about rate lock periods and many others. Give us a call at 2146635355.