Getting a Low Interest Rate

What is a Rate Lock?

When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a determined period while you work on the application process. This saves you from going through your entire application process and learning at the end that the interest rate has risen higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period typically costing more. A lending institution may agree to lock in an interest rate and points for a longer span of time, 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 Save on Interest

There are more ways to get a good rate, in addition to opting for a shorter rate lock period. A bigger down payment will get you a lower interest rate, since you will have a good amount of equity from the beginning. You can pay points to lower your rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the rate over the term of the loan. You pay more up front, but you'll come out ahead in the long run.

Executive Lending Group, LLC can answer questions about rate lock periods & many others. Give us a call at 8165258000.