"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a certain number of days while you work on your application process. This ensures that your interest rate will not grow as you are going through the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
There are more ways to get a better rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will get you a better interest rate, since you will have a good deal of equity from the beginning. You may opt to pay points to reduce your interest rate for the term of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the rate over the life of the loan. You are paying more up front, but you will save money in the long run.
Coastal Mortgage Corp. can answer questions about rate lock periods & many others. Call us: 504-866-5626.
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