Getting a Low Interest Rate
Locking It In
When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days while you work on the application process. This protects you from working through your whole application process and discovering at the end that the interest rate has gotten higher.
Rate lock periods can vary in length, between 15 to 60 days, with the longer spans generally costing more. A lender may agree to hold an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
Additional Ways to Save on Interest
There are other ways to get a better rate, besides opting for a shorter rate lock period. A bigger down payment will get you a reduced interest rate, since you're starting out with more equity. You might opt to pay points to lower your interest rate for the loan term, meaning you pay more up front. For many people, this is a good option..
Ward Kilduff Mortgage can answer questions about rate lock periods and many others. Call us at (860) 658-7100.
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