"Rate Lock" and other Ways to Get a Lower Interest Rate
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Freezing the Rate
When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a specific interest rate over a determined period while you work on the application process. This ensures that your interest rate won't go up during the application process.
While there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. A lender may agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are other ways to get a good rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the smaller the interest rate will be, since you will be entering the loan with more equity. You can pay points to lower your rate for the life of the loan, meaning you pay more initially. For a lot of people, this makes financial sense.
Prestige Home Mortgage can answer questions about rate lock periods & many others. Give us a call at 360-576-1920.