Getting a Low Interest Rate
Locking in your Interest Rate
When you are offered a "rate lock" from your lender, it means that you are guaranteed to keep a specific interest rate over a determined period for your application process. This prevents you from getting through your entire application process and finding out at the end that the interest rate has risen higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones usually costing more. A lending institution may agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to going with the shorter rate lock period, there are several ways you can attain the best rate. A larger down payment will result in a lower interest rate, because you will have a good deal of equity from the beginning. You could opt to pay points to bring down your rate over the term of the loan, meaning you pay more initially. For a lot of people, this makes financial sense..
Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods and many others. Give us a call: (207) 571-8034.