"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you are 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 saves you from getting through your whole application process and learning at the end that the interest rate has risen higher.
While there might be a choice of rate lock periods (from 15 to 60 days), the extended 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 have with a shorter rate lock span of time
Other Interest Saving Strategies
There are more ways to get a reduced rate, besides agreeing to a shorter rate lock period. The larger down payment you pay, the lower your interest rate will be, because you will be starting with more equity. You can pay points to reduce your interest rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for some 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.
At Carter Financial Solutions, we answer questions about this process every day. Call us: 8668408745.