Getting a Low Interest Rate
Locking It In
When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate over a determined period while you work on the application process. This protects you from getting through your entire application process and learning at the end that the interest rate has risen higher.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans typically costing more. A lender can agree to hold an interest rate and points for a longer span of time, say sixty 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
In addition to opting for the shorter rate lock period, there are other ways you can score the best rate. A bigger down payment will get you a better interest rate, because you'll have more equity from the beginning. You might opt to pay points to improve your rate over the term of the loan, meaning you pay more up front. For many people, this is a good option..
Coastal Mortgage Corp. can answer questions about rate lock periods and many others. Give us a call at 504-866-5626.
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