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

What is a Rate Lock?

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate over a determined period for the application process. This saves you from going through your entire application process and finding out at the end that the interest rate has gone up.

While there might be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. The lending institution will agree to freeze an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a good rate, besides opting for a shorter rate lock period. The more the down payment, the smaller your rate will be, as you will have more equity from the start. You can pay points to reduce your interest rate for the loan term, meaning you pay more up front. For a lot of people, this makes financial sense..

At Diamond Mortgage, LLC, we answer questions about this process every day. Call us at 3178427744.