Getting a Low Interest Rate

What is a Rate Lock?

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate over a certain number of days while you work on the application process. This ensures that your interest rate won't get higher while you are working through the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period generally costing more. The lender can agree to freeze an interest rate and points for a longer span of time, like sixty 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 Get a Great Interest Rate

In addition to going with a shorter lock period, there are more ways you can score the best rate. The more the down payment, the better your interest rate will be, because you will have more equity from the start. You can pay points to reduce your 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 will pay more initially, but you will come out ahead, especially if you don't refinance early.

1st Credential Mortgage Inc can answer questions about rate lock periods & many others. Give us a call: (281) 778-0805.

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