"Rate Lock" and other Ways to Get a Lower Interest Rate

Lock It In

When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate for a determined period for the application process. This means your interest rate will not grow during the application process.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans generally costing more. A lender may agree to lock in an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a reduced rate, besides opting for a shorter rate lock period. The larger down payment you can pay, the better the interest rate will be, since you will have more equity from the beginning. You may opt to pay points to improve your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You are paying more up front, but you will come out ahead, especially if you keep the loan for the full term.

AmeriBest Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 3217777277.