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

Locking It In

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

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lender can agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to opting for the shorter lock period, there are several ways you are able to get the best rate. The more the down payment, the better your interest rate will be, as you will be starting with more equity. You can pay points to improve your interest rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You will pay more up front, but you will come out ahead in the long run.

At 1st Credential Mortgage Inc, we answer questions about this process every day. Call us: (281) 778-0805.

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