"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate for a determined period for your application process. This means your interest rate will not go up as you are going through the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones typically costing more. A lender can agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Save on Interest
In addition to going with a shorter rate lock period, there are other ways you may be able to score the best rate. The larger down payment you make, the lower the rate will be, because you will be entering the loan with more equity. You might opt to pay points to improve your interest rate for the life of the loan, meaning you pay more up front. To many people, this makes sense and is a good deal..
At Affinity Mortgage Brokers, we answer questions about this process every day. Call us: 719-425-2226.