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

What is a Rate Lock?

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate over a certain number of days while you work on the application process. This saves you from working through your whole 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 longer spans are usually more expensive. A lending institution may agree to lock in an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

In addition to going with a shorter rate lock period, there are several ways you may be able to get the lowest rate. The bigger down payment you can pay, the smaller your rate will be, since you will have more equity from the start. You may choose to pay points to improve your rate over the loan term, meaning you pay more initially. To a lot of people, this makes financial sense..

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call at 2817780805.