"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 set interest rate for a determined period while you work on the application process. This protects you from going through your whole application process and discovering at the end that the interest rate has gotten higher.
Rate lock periods can be various lengths of time, between 15 to 60 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 with a shorter period
More Ways to Get a Great Interest Rate
In addition to opting for the shorter rate lock period, there are other ways you may be able to attain the lowest rate. A larger down payment will result in a reduced interest rate, because you are starting out with more equity. You can pay points to lower your interest rate over the term of the loan, meaning you pay more initially. For many people, this makes sense and is a good deal..
At Pioneer Mortgage Corp, we answer questions about this process every day. Call us at 781-245-4924.