"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days while you work on your application process. This ensures that your interest rate won't grow during the application process.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter rate lock period
Other Interest Saving Strategies
There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. The bigger the down payment, the smaller the rate will be, since you will be starting with more equity. You might opt to pay points to lower your interest rate over the life of the loan, meaning you pay more up front. For a lot of people, this makes financial sense..
American Mortgage Advisers, Inc can walk you through the pitfalls of getting a mortgage. Call us: 214-865-7442.
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