Getting a Low Interest Rate

Locking It In

When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate over a determined period for the application process. This means your interest rate cannot rise during the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are usually 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 with a shorter period

Other Interest Saving Strategies

There are more ways to get a low rate, besides choosing a shorter rate lock period. The larger down payment you make, the smaller your interest rate will be, as you will have more equity from the start. You can pay points to improve your rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you keep the loan for the full term.

Foxfield Financial can answer questions about rate lock periods and many others. Call us: 720-598-8300.

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