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

Locking It In

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a particular interest rate over a certain number of days while you work on your application process. This saves you from getting through your entire application process and learning at the end that your interest rate has gone up.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans usually costing more. The lender may agree to hold an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a lower rate, besides opting for a shorter rate lock period. The more the down payment, the better the interest rate will be, since you will be entering the loan with more equity. You might choose to pay points to improve your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you will come out ahead in the long run.

Stepping Stone Mortgage can answer questions about rate lock periods & many others. Call us: 5416833300.