"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a determined period while you work on the application process. This protects you from working through your whole application process and learning at the end that your interest rate has risen higher.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans usually costing more. A lending institution may agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are more ways to get a lower rate, besides choosing a shorter rate lock period. The bigger down payment you can pay, the smaller the rate will be, as you will be entering the loan with more equity. You could choose to pay points to bring down your rate for the loan term, meaning you pay more up front. For many people, this makes financial sense..
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Give us a call at 561-395-4264.