"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you're promised a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate over a certain number of days for your application process. This means your interest rate cannot rise during the application process.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter rate lock span of time
Other Interest Saving Strategies
There are more ways to get a lower rate, in addition to agreeing to a shorter rate lock period. A larger down payment will result in a reduced interest rate, because you are starting out with a good deal of equity. You can pay points to improve your rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the rate over the life of the loan. You are paying more up front, but you'll save money, especially if you don't refinance early.
Coastal Mortgage Corp. can answer questions about rate lock periods & many others. Call us at 504-866-5626.
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