"Rate Lock" and other Ways to Get a Lower Interest Rate
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Freezing the Rate
When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate over a determined period while you work on the application process. This protects you from going through your whole application process and finding out at the end that your interest rate has risen higher.
While there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter period
More Ways to Save on Interest
In addition to choosing the shorter lock period, there are several ways you are able to get the best rate. A bigger down payment will result in a reduced interest rate, since you'll have a good deal of equity from the beginning. You could choose to pay points to lower your interest rate for the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to reduce the interest rate over the life of the loan. You'll pay more initially, but you'll come out ahead in the end.
At Allegiant Mortgage, LLC, we answer questions about this process every day. Give us a call: (615) 717-3185 or (615) 417-2129.