Getting a Low Interest Rate
Locking in your Interest Rate
When you're promised a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on the application process. This ensures that your interest rate won't grow as you are working through the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. A lending institution 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
There are more ways to get a low rate, in addition to going with a shorter rate lock period. A bigger down payment will give you a reduced interest rate, since you will have a good amount of equity from the beginning. You might opt to pay points to improve your interest rate over the loan term, meaning you pay more up front. For a lot of people, this is a good option..
Pacific Loan Brokers can walk you through the pitfalls of getting a mortgage. Give us a call: 877-310-6200.
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