"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 particular interest rate for a certain number of days while you work on the application process. This means your interest rate cannot rise while you are going through the application process.
Although there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would have with a shorter rate lock span of time
Other Ways to Save on Interest
In addition to going with the shorter lock period, there are more ways you may be able to score the best rate. The bigger the down payment, the lower your interest rate will be, as you will be starting with more equity. You could choose to pay points to lower your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you'll come out ahead, especially if you don't refinance early.
Longhorn Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 512-302-9410.
Do you have a question regarding a mortgage program?