"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate over a determined period for the application process. This keeps you from going through your entire application process and learning at the end that your interest rate has gotten higher.
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 probably have a higher interest rate than you would with a shorter rate lock period
Additional Ways to Save on Interest
In addition to opting for a shorter rate lock period, there are other ways you can score the best rate. A larger down payment will result in a reduced interest rate, because you'll have more equity from the beginning. You can pay points to lower your interest rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You are paying more initially, but you will come out ahead in the long run.
Financial Edge Mortgage Corp. can answer questions about rate lock periods and many others. Give us a call: 425-508-9988.
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