Getting a Low Interest Rate

What is a Rate Lock?

When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days for your application process. This saves you from going through your entire application process and finding out at the end that your interest rate has gotten higher.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. A lender can 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 a shorter period.

More Ways to Get a Great Interest Rate

There are other ways to get a low rate, besides going with a shorter rate lock period. A bigger down payment will get you a better interest rate, because you're starting out with more equity. You can pay points to improve your interest rate over the loan term, 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 life of the loan. You'll pay more initially, but you'll come out ahead in the long run.

Carter Financial Solutions can answer questions about rate lock periods & many others. Give us a call at 866-840-8745 x2.


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Carter Financial Solutions

1810 Pacific Ave
Stockton, CA 95204