"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate for a determined period while you work on your application process. This keeps you from working through your entire application process and finding out at the end that the interest rate has gone up.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution will agree to lock in an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
Other Interest Saving Strategies
In addition to going with the shorter lock period, there are several ways you can score the best rate. The larger down payment you make, the lower the interest rate will be, because you will have more equity from the beginning. You might choose to pay points to reduce your rate over the loan term, meaning you pay more up front. To a lot of people, this makes financial sense..
Lear Financial Group LLC.
can walk you through the pitfalls of getting a mortgage. Call us at 214-869-7339.