"Rate Lock" and other Ways to Get a Lower Interest Rate
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Locking in your Interest Rate
When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate for a certain number of days while you work on the application process. This keeps you from working through your whole application process and learning at the end that your interest rate has risen higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter span of time
Other Interest Saving Strategies
There are more ways to get a better rate, in addition to going with a shorter rate lock period. A larger down payment will get you a better interest rate, because you're starting out with more equity. You can pay points to bring down your rate for the loan term, meaning you pay more initially. To a lot of people, this makes sense and is a good deal.
Strategic Mortgage, LLC can answer questions about rate lock periods and many others. Call us at 812-989-9358.