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

What is a Rate Lock?

When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a set interest rate over a certain number of days for the application process. This means your interest rate cannot go up during the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty 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 rate than you would have with a shorter rate lock span of time

Other Ways to Save on Interest

In addition to going with the shorter lock period, there are more ways you can attain the best rate. A larger down payment will give you a reduced interest rate, since you will have more equity from the beginning. You can pay points to reduce your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you'll save money in the end.

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.