Getting a Low Interest Rate

Locking in your Interest Rate

When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a certain number of days for your application process. This prevents you from going through your whole application process and learning at the end that the interest rate has risen higher.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter rate lock period

Other Interest Saving Strategies

There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. The bigger down payment you pay, the better the interest rate will be, as you will be starting with more equity. You could choose to pay points to improve your interest rate for the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you'll come out ahead in the end.

At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Call us: (941) 366-5800.