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

What is a Rate Lock?

When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a set interest rate for a certain number of days for your application process. This means your interest rate will not get higher while you are working through the application process.

Rate lock periods can vary in length, between 15 to 60 days, with the longer ones usually costing more. The lending institution can agree to hold 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 with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to going with a shorter rate lock period, there are more ways you may be able to get the lowest rate. The more the down payment, the smaller your interest rate will be, because you will be starting with more equity. You might opt to pay points to lower 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 term of the loan. You'll pay more initially, but you will save money in the end.

Washingtonian Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: 410-451-2755.