Getting a Low 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 for a determined period for the application process. This means your interest rate can't rise as you are going through the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter rate lock period

Additional Ways to Save on Interest

There are more ways to get a lower rate, besides opting for a shorter rate lock period. The bigger the down payment, the smaller the rate will be, as you will be entering the loan with more equity. You can pay points to lower your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You pay more up front, but you will save money, especially if you don't refinance early.

Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods and many others. Call us at (207) 571-8034.