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

What is a Rate Lock?

When you are offered a "rate lock" from a 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 prevents you from getting through your entire application process and discovering at the end that your interest rate has gone up.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lending institution can agree to hold an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

More Ways to Save on Interest

In addition to going with a shorter lock period, there are several ways you are able to get the best rate. The more the down payment, the smaller your rate will be, as you will have more equity from the beginning. You could opt to pay points to improve your interest rate for the loan term, meaning you pay more up front. For a lot of people, this is a good option..

At Affinity Mortgage Brokers, we answer questions about this process every day. Give us a call: 719-331-6278.

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