"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a certain interest rate over a determined period while you work on the application process. This prevents you from going through your whole application process and finding out at the end that the interest rate has gone up.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lending institution will agree to hold an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to opting for the shorter lock period, there are more ways you may be able to get the lowest rate. The more the down payment, the better your interest rate will be, because you will be starting with more equity. You can pay points to bring down your rate over the term of the loan, meaning you pay more up front. For many people, this makes sense and is a good deal..
Ward Kilduff Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (860) 658-7100.
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