"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days for the application process. This ensures that your interest rate can't get higher while you are going through the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period usually costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would with a shorter rate lock period
More Ways to Save on Interest
There are other ways to get a low rate, in addition to choosing a shorter rate lock period. A larger down payment will give you a better interest rate, since you will have a good amount of equity from the beginning. You can pay points to lower your rate for the life of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the rate over the life of the loan. You are paying more up front, but you will save money in the long run.
Alternative Mortgage Group can answer questions about rate lock periods & many others. Give us a call at 561-395-4264.