"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days while you work on your application process. This saves you from getting through your whole application process and discovering at the end that your interest rate has risen higher.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
In addition to choosing a shorter rate lock period, there are several ways you may be able to attain the best rate. A bigger down payment will give you a reduced interest rate, since you will be starting out with more equity. You might choose to pay points to reduce your 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 are paying more up front, but you will save money, especially if you don't refinance early.
Contemporary Mortgage Services, Inc can answer questions about rate lock periods and many others. Call us: 407-834-3377.
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