"Rate Lock" and other Ways to Get a Lower Interest Rate

Locking It In

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on the application process. This means your interest rate cannot go up while you are going through the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would have with a shorter rate lock span of time

Other Interest Saving Strategies

There are other ways to get a low rate, in addition to agreeing to a shorter rate lock period. A larger down payment will get you a better interest rate, since you're starting out with a good deal of equity. You can pay points to improve your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the term of the loan. You'll pay more up front, but you'll come out ahead, especially if you don't refinance early.

Foxfield Financial can answer questions about rate lock periods and many others. Give us a call at 720-598-8300.

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