Getting a Low Interest Rate
Freezing the Rate
When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate for a certain number of days while you work on the application process. This means your interest rate cannot rise while you are going through the application process.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones usually costing more. The lending institution will agree to lock in an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a good rate, in addition to going with a shorter rate lock period. The larger the down payment, the better your rate will be, as you will be entering the loan with more equity. You can pay points to improve your interest rate over the term of the loan, meaning you pay more initially. For a lot of people, this is a good option..
Financial Edge Mortgage Corp. can answer questions about rate lock periods & many others. Call us: 425-508-9988.
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