"Rate Lock" and other Ways to Get a Lower Interest Rate
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Freezing the Rate
When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days for the application process. This protects you from getting through your whole application process and discovering at the end that your interest rate has gone up.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
There are more ways to get a low rate, in addition to choosing a shorter rate lock period. A larger down payment will result in a lower interest rate, since you will have more equity from the beginning. You might opt to pay points to lower your rate over the term of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You are paying more initially, but you will come out ahead in the long run.
Fortune Financial Corporation can walk you through the pitfalls of getting a mortgage. Give us a call: 731-925-9959.