Getting a Low Interest Rate
Locking It In
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate for a certain number of days for your application process. This ensures that your interest rate will not grow during the application process.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would with a shorter span of time
More Ways to Save on Interest
There are other ways to get a reduced rate, in addition to choosing a shorter rate lock period. A bigger down payment will result in a reduced interest rate, because you'll have a good deal of equity at the start. You may choose to pay points to lower your interest rate over the loan term, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will save money in the long run.
Real Property Finance can answer questions about rate lock periods and many others. Call us at 310-379-5997.
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