"Rate Lock" and other Ways to Get a Lower Interest Rate

Freezing the Rate

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate for a certain number of days while you work on the application process. This means your interest rate can't go up while you are going through the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans typically costing more. A lender can agree to lock in an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a reduced rate, in addition to opting for a shorter rate lock period. A bigger down payment will get you a lower interest rate, because you'll be starting out with a good deal of equity. You can pay points to bring down your interest rate for the loan term, meaning you pay more initially. For many people, this makes financial sense..

MidTowne Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: (478) 746-2063.

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