"Rate Lock" and other Ways to Get a Lower Interest Rate
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Locking in your Interest Rate
When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days while you work on the application process. This protects you from going through your whole application process and learning at the end that the interest rate has gotten higher.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lender can agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
More Ways to Save on Interest
There are other ways to get a lower rate, besides opting for a shorter rate lock period. The larger the down payment, the better your interest rate will be, as you will have more equity from the beginning. You might choose to pay points to lower your interest rate over the loan term, meaning you pay more initially. To a lot of people, this makes financial sense..
Cosatal Financial Group can walk you through the pitfalls of getting a mortgage. Give us a call at (512) 292-3494.