Getting a Low Interest Rate

Freezing the Rate

When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a determined period for the application process. This protects you from getting through your whole application process and discovering at the end that your interest rate has gotten higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lender may agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Ways to Save on Interest

In addition to choosing a shorter lock period, there are more ways you may be able to get the best rate. A larger down payment will result in a better interest rate, because you are starting out with more equity. You can pay points to bring down your rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the term of the loan. You'll pay more up front, but you will come out ahead in the end.

At Alternative Mortgage Group, we answer questions about this process every day. Give us a call: 561-395-4264.


Alternative Mortgage Group

80 SW 14 Ave
Boca Raton, FL 33486