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 determined period for the application process. This saves you from getting through your whole application process and discovering at the end that the interest rate has risen higher.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter rate lock span of time
Other Interest Saving Strategies
In addition to choosing a shorter lock period, there are several ways you can get the best rate. A larger down payment will result in a reduced interest rate, because you'll be starting out with more equity. You may choose to pay points to lower your rate for the life of the loan, 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'll pay more initially, but you will come out ahead, especially if you don't refinance early.
Pioneer Mortgage Corp can answer questions about rate lock periods & many others. Give us a call at 781-245-4924.