Getting a Low Interest Rate

What is a Rate Lock?

When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a certain interest rate over a determined period while you work on the application process. This means your interest rate can't get higher during the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones usually costing more. The lender 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 that of a rate lock of a shorter period.

Additional Ways to Save on Interest

There are other ways to get a lower rate, besides choosing a shorter rate lock period. The larger the down payment, the better the rate will be, as you will be starting with more equity. You can pay points to bring down your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the rate over the life of the loan. You'll pay more up front, but you will save money, especially if you keep the loan for a long time.

Nationwide Home Loans can walk you through the pitfalls of getting a mortgage. Call us at 5626935048.

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Nationwide Home Loans

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