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

Locking in your Interest Rate

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate over a certain number of days while you work on your application process. This keeps you from working through your entire application process and learning at the end that the interest rate has risen higher.

While there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. A lender will agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

More Ways to Save on Interest

There are other ways to get a low rate, in addition to choosing a shorter rate lock period. The more the down payment, the lower the rate will be, because you will be entering the loan with more equity. You can pay points to improve your rate over the life of the loan, meaning you pay more up front. For many people, this makes financial sense..

Foxfield Financial can answer questions about rate lock periods and many others. Give us a call: 7205988300.

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