"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days for the application process. This ensures that your interest rate will not go up while you are working through the application process.
Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. A lending institution may agree to hold an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
Other Interest Saving Strategies
There are more ways to get a reduced rate, besides agreeing to a shorter rate lock period. A bigger down payment will get you a lower interest rate, because you are starting out with more equity. You can pay points to improve your rate over the life of the loan, meaning you pay more initially. For a lot of people, this is a good option..
Pacific Loan Brokers can answer questions about rate lock periods and many others. Call us at 877-310-6200.
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