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

Locking It In

When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a set interest rate over a determined period for your application process. This protects you from going through your whole application process and learning at the end that the interest rate has gotten higher.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would with a shorter span of time

Additional Ways to Save on Interest

In addition to opting for the shorter lock period, there are several ways you can attain the best rate. A bigger down payment will result in a reduced interest rate, because you'll have more equity from the beginning. You might opt 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 some is to pay points to improve the interest rate over the life of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

At 1st Credential Mortgage Inc, we answer questions about this process every day. Give us a call: (281) 778-0805.