"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a specific interest rate for a certain number of days for the application process. This keeps you from working through your whole application process and finding out at the end that your interest rate has gone up.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans usually costing more. A lender can agree to hold an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to choosing the shorter rate lock period, there are other ways you may be able to get the best rate. A bigger down payment will give you a lower interest rate, because you will be starting out with more equity. You can pay points to bring down your rate for the term of the loan, meaning you pay more initially. For many people, this is a good option..
Longhorn Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 512-302-9410.
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