"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a set interest rate for a certain number of days while you work on your application process. This prevents you from getting through your entire application process and finding out at the end that your interest rate has gotten higher.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. The lender will agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Ways to Save on Interest
In addition to choosing the shorter lock period, there are more ways you can score the best rate. A bigger down payment will get you a lower interest rate, because you'll have more equity at the start. You could opt to pay points to reduce your interest rate over the life of the loan, meaning you pay more initially. For many people, this is a good option..
Carter Financial Solutions can walk you through the pitfalls of getting a mortgage. Give us a call: 866-840-8745 x2.