Getting a Low Interest Rate
What is a Rate Lock?
When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a certain number of days while you work on your application process. This saves you from going through your entire application process and learning at the end that the interest rate has risen higher.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones 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 have with a shorter rate lock span of time
More Ways to Get a Great Interest Rate
There are more ways to get a good rate, in addition to choosing a shorter rate lock period. The bigger the down payment, the lower the rate will be, because you will be starting with more equity. You could choose to pay points to improve your interest rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll come out ahead, especially if you keep the loan for a long time.
At Alternative Mortgage Group, we answer questions about this process every day. Give us a call: 561-395-4264.