"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking It In
When you are promised a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate for a determined period for the application process. This saves you from going through your whole application process and finding out at the end that your interest rate has gone up.
Although there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter period
Other Ways to Save on Interest
There are more ways to get a low rate, besides going with a shorter rate lock period. A bigger down payment will give you a lower interest rate, because you'll have more equity at the start. You may opt to pay points to improve your rate over the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to improve the rate over the term of the loan. You'll pay more initially, but you will save money in the long run.
At Real Property Finance, we answer questions about this process every day. Give us a call at 310-379-5997.
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