"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate for a determined period for your application process. This ensures that your interest rate cannot rise during the application process.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period usually costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter rate lock period
Other Interest Saving Strategies
There are other ways to get a reduced rate, besides going with a shorter rate lock period. The bigger the down payment, the lower the rate will be, as you will have more equity from the beginning. You can pay points to improve your rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to reduce the rate over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you keep the loan for a long time.
Pioneer Mortgage Corp can answer questions about rate lock periods and many others. Give us a call: 781-245-4924.