Getting a Low Interest Rate

What is a Rate Lock?

When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days for the application process. This saves you from going through your whole application process and finding out at the end that your interest rate has gone up.

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans generally costing more. The lending institution will 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 higher than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a lower rate, in addition to choosing a shorter rate lock period. The larger down payment you make, the better your rate will be, as you will be starting with more equity. You could opt to pay points to improve your rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the rate over the life of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

Stepping Stone Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: (541) 683-3300.

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