"Rate Lock" and other Ways to Get a Lower Interest Rate
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Locking in your Interest Rate
When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a set interest rate for a certain number of days for the application process. This means your interest rate can't grow during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans typically costing more. A lender can agree to hold an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
Other Ways to Save on Interest
In addition to choosing a shorter lock period, there are more ways you can attain the lowest rate. The bigger down payment you can pay, the better your interest rate will be, since you will have more equity from the beginning. You could choose to pay points to lower your interest rate over the life of the loan, meaning you pay more up front. For a lot of people, this is a good option..
At Prime Lenders, we answer questions about this process every day. Give us a call at 954-486-6000.