"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate over a determined period for the application process. This means your interest rate can't get higher during the application process.
While there can be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter rate lock period
Other Interest Saving Strategies
In addition to opting for a shorter rate lock period, there are several ways you can get the best rate. A larger down payment will give you a reduced interest rate, because you're starting out with more equity. You can pay points to improve your interest rate over the life of the loan, meaning you pay more up front. For many people, this makes financial sense..
American Mortgage Advisers, Inc can answer questions about rate lock periods and many others. Give us a call at 214-865-7442.
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