Getting a Low Interest Rate
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Lock It In
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days while you work on your application process. This means your interest rate cannot get higher during the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans typically costing more. A lending institution can agree to freeze an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
Other Interest Saving Strategies
In addition to opting for a shorter lock period, there are other ways you can score the best rate. The bigger down payment you make, the lower the interest rate will be, since you will be entering the loan with more equity. You can pay points to bring down your interest rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will save money in the end.
Affinity Lending Inc can walk you through the pitfalls of getting a mortgage. Call us at 816-365-2568.