Getting a Low Interest Rate

Freezing the Rate

When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a determined period while you work on your application process. This prevents you from working through your entire application process and finding out at the end that the interest rate has gotten higher.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter span of time

Other Interest Saving Strategies

There are more ways to get a good rate, besides going with a shorter rate lock period. A bigger down payment will get you a lower interest rate, since you'll have a good deal of equity at the start. You can pay points to bring down your interest rate for the term of the loan, meaning you pay more initially. For many people, this makes sense and is a good deal..

At American Mortgage Advisers, Inc, we answer questions about this process every day. Call us at 2147390569.