Getting a Low Interest Rate
Freezing the Rate
When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate for a certain number of days for the application process. This ensures that your interest rate cannot go up during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would have with a shorter rate lock period
Other Interest Saving Strategies
There are more ways to get a better rate, besides opting for a shorter rate lock period. The bigger the down payment, the better the rate will be, because you will be starting with more equity. You might opt to pay points to lower your rate for the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to improve the rate over the term of the loan. You'll pay more up front, but you'll save money, especially if you keep the loan for the full term.
Stepping Stone Mortgage can answer questions about rate lock periods & many others. Call us: 5416833300.