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

Freezing the Rate

When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days while you work on your application process. This prevents you from working through your entire application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones generally costing more. The lender may agree to freeze an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Ways to Save on Interest

In addition to choosing the shorter lock period, there are other ways you can attain the best rate. The larger down payment you can pay, the better your interest rate will be, as you will be entering the loan with more equity. You might choose to pay points to bring down your rate for the loan term, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..

AmeriBest Mortgage can answer questions about rate lock periods and many others. Give us a call: 3217777277.