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

Lock It In

When you're 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 your application process. This protects you from working through your entire application process and learning at the end that your interest rate has gotten higher.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. A lending institution will agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Other Ways to Save on Interest

In addition to going with a shorter lock period, there are several ways you can get the best rate. A larger down payment will get you a reduced interest rate, since you will have more equity at the start. You can pay points to improve your rate for the loan term, meaning you pay more up front. For 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 at 7812454924.