"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a certain number of days while you work on your application process. This keeps you from going through your entire application process and discovering at the end that your interest rate has gotten higher.
Although there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution will agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
Other Interest Saving Strategies
There are other ways to get a low rate, in addition to agreeing to a shorter rate lock period. The more the down payment, the smaller your interest rate will be, because you will be starting with more equity. You can pay points to improve your interest rate for the term of the loan, meaning you pay more initially. For many people, this is a good option..
Executive Lending Group, LLC can walk you through the pitfalls of getting a mortgage. Call us at (816) 525-8000 & (81.
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