"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 set interest rate for a certain number of days while you work on the application process. This prevents you from getting through your whole application process and learning 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 typically costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter rate lock period
Other Interest Saving Strategies
In addition to opting for the shorter lock period, there are more ways you can score the lowest rate. A bigger down payment will result in a reduced interest rate, because you're starting out with more equity. You might opt to pay points to bring down your rate over the life of the loan, meaning you pay more initially. For many people, this is a good option..
At Harbor View Lending* a DBA of Megastar Financial, we answer questions about this process every day. Give us a call at (207) 571-8034.