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

What is a Rate Lock?

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a determined period while you work on the application process. This prevents you from getting through your entire application process and learning at the end that your interest rate has gone up.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans typically costing more. The lender can agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Other Interest Saving Strategies

There are more ways to get a lower rate, in addition to going with a shorter rate lock period. The bigger down payment you make, the smaller your rate will be, because you will be entering the loan with more equity. You can pay points to lower your interest rate for the life of the loan, meaning you pay more initially. To a lot of people, this makes financial sense..

Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods & many others. Give us a call: (207) 571-8034.