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

Lock It In

When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days for your application process. This keeps you from working through your entire application process and finding out at the end that the interest rate has risen higher.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution may agree to freeze 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.

Additional Ways to Save on Interest

In addition to opting for a shorter lock period, there are other ways you can get the lowest rate. The bigger down payment you pay, the lower your interest rate will be, since you will have more equity from the beginning. You can pay points to improve your interest rate for the life of the loan, meaning you pay more initially. For a lot of people, this makes financial sense..

At Stepping Stone Mortgage, we answer questions about this process every day. Call us: (541) 683-3300.

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