"Rate Lock" and other Ways to Get a Lower Interest Rate
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Freezing the Rate
When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate over a certain number of days for the application process. This keeps you from working through your entire application process and learning at the end that your interest rate has risen higher.
Rate lock periods can vary in length, between 15 to 60 days, with the longer ones typically costing more. A lending institution may agree to freeze 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 with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter lock period, there are other ways you may be able to attain the lowest rate. The larger the down payment, the better your interest rate will be, as you will have more equity from the start. You can pay points to bring down your interest rate for the life of the loan, meaning you pay more up front. For many people, this makes financial sense..
First Equity can walk you through the pitfalls of getting a mortgage.