"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest 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 while you work on your application process. This keeps you from working through your whole application process and finding out at the end that your interest rate has risen higher.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
In addition to going with the shorter rate lock period, there are several ways you can score the lowest rate. The larger the down payment, the smaller the rate will be, since you will be starting with more equity. You might choose to pay points to improve your interest rate for the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the interest rate over the term of the loan. You'll pay more up front, but you'll come out ahead in the end.
Diamond Mortgage, LLC can answer questions about rate lock periods & many others. Give us a call: 3178427744.