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

What is a Rate Lock?

When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days for the application process. This prevents you from getting through your whole application process and finding out at the end that your interest rate has gone up.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones usually costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter span of time

Other Ways to Save on Interest

There are more ways to get a better rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a better interest rate, since you'll have a good deal of equity from the beginning. You may choose to pay points to reduce your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You will pay more up front, but you will come out ahead in the long run.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (281) 778-0805.