"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 particular interest rate over a certain number of days for your application process. This means your interest rate cannot go up while you are working through the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones typically costing more. 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

Additional Ways to Save on Interest

There are more ways to get a lower rate, in addition to opting for a shorter rate lock period. A larger down payment will get you a reduced interest rate, since you're starting out with a good deal of equity. You can pay points to bring down your interest rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the rate over the term of the loan. You are paying more up front, but you'll come out ahead in the long run.

American Mortgage Advisers, Inc can walk you through the pitfalls of getting a mortgage. Call us at 2148657442.