Getting a Low Interest Rate

Locking in your Interest Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on your application process. This keeps you from getting through your whole application process and learning at the end that the interest rate has gone up.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones generally costing more. A lender will agree to lock in an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a reduced rate, besides agreeing to a shorter rate lock period. A larger down payment will give you a lower interest rate, since you're starting out with more equity. You could choose to pay points to improve your rate over the term of the loan, meaning you pay more up front. 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 up front, but you'll come out ahead, especially if you keep the loan for the full term.

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