"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a specific interest rate for a certain number of days for your application process. This ensures that your interest rate won't rise as you are working through the application process.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would have with a shorter rate lock span of time
Additional Ways to Save on Interest
There are other ways to get a better rate, besides choosing a shorter rate lock period. A bigger down payment will get you a reduced interest rate, since you'll have a good amount of equity from the beginning. You can pay points to reduce your interest rate for the life of the loan, meaning you pay more up front. For a lot of people, this is a good option..
At Real Property Finance, we answer questions about this process every day. Call us at 310-379-5997.
Do you have a question regarding a mortgage program?