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

Locking It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a determined period for your application process. This saves you from getting through your whole application process and finding out at the end that your interest rate has risen higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones typically costing more. A lender can agree to lock in an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a low rate, besides going with a shorter rate lock period. The larger down payment you can pay, the smaller the rate will be, as you will be entering the loan with more equity. You can pay points to reduce your rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You'll pay more up front, but you will save money, especially if you keep the loan for a long time.

At Foxfield Financial, we answer questions about this process every day. Call us: 7205988300.

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