"Rate Lock" and other Ways to Get a Lower Interest Rate

Locking It In

When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate for a determined period while you work on the application process. This ensures that your interest rate cannot get higher while you are going through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. The lending institution may agree to hold an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a reduced rate, besides agreeing to a shorter rate lock period. A larger down payment will result in a reduced interest rate, since you will have more equity at the start. You can pay points to reduce 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 bring the rate down over the life of the loan. You'll pay more initially, but you will save money in the long run.

Marshall Lending can answer questions about rate lock periods and many others. Call us: 9162758775.

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