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

Locking in your Interest Rate

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a certain number of days for your application process. This keeps you from working through your entire application process and discovering at the end that the interest rate has risen higher.

Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter period

More Ways to Save on Interest

In addition to choosing a shorter lock period, there are other ways you can get the best rate. The bigger the down payment, the better your interest rate will be, because you will have more equity from the beginning. You could choose to pay points to bring down your rate over the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the interest rate over the term of the loan. You pay more up front, but you will come out ahead, especially if you keep the loan for the full term.

Boardwalk Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 1-800-606-2794.