"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a specific interest rate over a determined period for the application process. This keeps you from working through your entire application process and learning at the end that the interest rate has risen higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lending institution may agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
More Ways to Save on Interest
In addition to going with a shorter lock period, there are other ways you are able to get the lowest rate. A bigger down payment will give you a lower interest rate, because you're starting out with more equity. You could opt to pay points to bring down your rate over the term of the loan, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..
At Hancock Mortgage Partners, LLC NMLS# 229844, we answer questions about this process every day. Give us a call: 225 819 7670.