"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
When you are promised a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate over a certain number of days for your application process. This saves you from getting through your entire application process and discovering at the end that your interest rate has gone up.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
In addition to going with the shorter lock period, there are other ways you are able to score the lowest rate. The more the down payment, the smaller your interest rate will be, as you will be entering the loan with more equity. You could opt to pay points to lower your interest rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense 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.
Mario Vega can answer questions about rate lock periods & many others. Call us at 877-310-6200.
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