Getting a Low Interest Rate
What is a Rate Lock?
When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on the application process. This keeps you from getting through your whole application process and discovering at the end that your interest rate has gotten higher.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period typically costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher interest rate than you would with a shorter rate lock period
More Ways to Get a Great Interest Rate
There are more ways to get a reduced rate, besides choosing a shorter rate lock period. The larger down payment you make, the better the rate will be, since you will have more equity from the start. You can pay points to improve your interest rate over the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the interest rate over the life of the loan. You are paying more initially, but you'll save money, especially if you don't refinance early.
At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Give us a call at (941) 366-5800.
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