"Rate Lock" and other Ways to Get a Lower Interest Rate

Freezing the Rate

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

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans usually costing more. The lending institution will agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a better rate, in addition to choosing a shorter rate lock period. A bigger down payment will get you a better interest rate, because you are starting out with more equity. You might opt to pay points to improve your rate for the life of the loan, meaning you pay more initially. To many people, this makes sense and is a good deal..

Pioneer Mortgage Corp can walk you through the pitfalls of getting a mortgage. Give us a call: 7812454924.