Getting a Low Interest Rate
What is a Rate Lock?
When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate over a determined period for the application process. This saves you from getting through your entire application process and learning at the end that the interest rate has gone up.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. The lending institution may agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are more ways to get a reduced rate, in addition to choosing a shorter rate lock period. The larger the down payment, the lower the interest rate will be, because you will be starting with more equity. You can pay points to improve your rate for the loan term, meaning you pay more up front. To many people, this is a good option..
At Coastal Mortgage Corp., we answer questions about this process every day. Give us a call at 504-866-5626.
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