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

Lock It In

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

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period typically costing more. The lending institution will 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 higher than that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

In addition to going with a shorter lock period, there are other ways you can attain the best rate. A larger down payment will get you a lower interest rate, because you'll have more equity from the beginning. You can pay points to lower your interest rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you don't refinance early.

AmeriBest Mortgage can answer questions about rate lock periods & many others. Call us at 3217777277.