"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a set interest rate over a determined period while you work on your application process. This saves you from working through your whole application process and learning at the end that your interest rate has gone up.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lender may agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter rate lock period, there are several ways you are able to score the best rate. The larger down payment you pay, the better the rate will be, as you will be starting with more equity. You might opt to pay points to reduce your rate over the term of the loan, meaning you pay more up front. 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 at (207) 571-8034.