"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate for a certain number of days while you work on the application process. This ensures that your interest rate won't grow during the application process.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would have with a shorter period
More Ways to Get a Great Interest Rate
In addition to choosing the shorter lock period, there are more ways you are able to get the lowest rate. A bigger down payment will give you a lower interest rate, because you'll have more equity at the start. You may choose to pay points to reduce your interest rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You will pay more up front, but you'll save money in the long run.
At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Give us a call: (941) 366-5800.
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