"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a certain number of days for your application process. This saves you from going through your entire application process and discovering at the end that your interest rate has gone up.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
There are other ways to get a good rate, in addition to opting for a shorter rate lock period. The more the down payment, the lower your rate will be, because you will have more equity from the beginning. You can pay points to reduce your rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will come out ahead in the end.
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