"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate for a certain number of days for your application process. This protects you from working through your whole application process and finding out at the end that your interest rate has gotten higher.
Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. A lending institution will agree to freeze an interest rate and points for a longer period, say 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
There are more ways to get a low rate, besides going with a shorter rate lock period. A larger 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 lower your interest rate over the loan term, meaning you pay more initially. For a lot of people, this makes financial sense..
Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Call us at (207) 571-8034.