Getting a Low Interest Rate
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What is a Rate Lock?
When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate for a determined period for your application process. This means your interest rate can't get higher during the application process.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones generally costing more. A lending institution will agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
Other Ways to Save on Interest
There are more ways to get a better rate, besides going with a shorter rate lock period. A bigger down payment will result in a lower interest rate, since you're starting out with more equity. You can pay points to reduce your rate for the term of the loan, meaning you pay more initially. To a lot of people, this makes financial sense.
At Agape Mortgages Inc, we answer questions about this process every day. Call us at 503-253-3299.