Getting a Low Interest Rate
What is a Rate Lock?
When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate for a determined period while you work on the application process. This means your interest rate will not get higher during the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. A lending institution may agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
Other Interest Saving Strategies
In addition to going with a shorter rate lock period, there are several ways you may be able to attain the best rate. The bigger down payment you make, the better the interest rate will be, since you will have more equity from the start. You can pay points to bring down your interest rate over the term of the loan, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..
Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods and many others. Give us a call: (207) 571-8034.