Getting a Low Interest Rate
Locking It In
When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate for a determined period for the application process. This keeps you from going through your whole application process and discovering at the end that your interest rate has gotten higher.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter rate lock span of time
More Ways to Get a Great Interest Rate
There are other ways to get a lower rate, in addition to agreeing to a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you're starting out with a good deal of equity. You may choose to pay points to improve your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to improve the interest rate over the term of the loan. You'll pay more up front, but you will save money in the long run.
At America's Money Source, we answer questions about this process every day. Call us: (407) 898-7559.
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