Getting a Low Interest Rate
Locking in your Interest Rate
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a determined period while you work on your application process. This means your interest rate can't rise during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period usually costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would have with a shorter period
Additional Ways to Save on Interest
There are other ways to get a low rate, besides opting for a shorter rate lock period. A larger down payment will result in a lower interest rate, because you'll have more equity from the beginning. You can pay points to reduce 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 bring the rate down over the term of the loan. You pay more up front, but you will save money, especially if you don't refinance early.
At Stepping Stone Mortgage, we answer questions about this process every day. Call us: 5416833300.