Getting a Low Interest Rate
What is a Rate Lock?
When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a certain number of days while you work on your application process. This ensures that your interest rate will not get higher during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period generally costing more. The lending institution will agree to hold an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
Additional Ways to Save on Interest
There are more ways to get a low rate, besides agreeing to a shorter rate lock period. The larger down payment you pay, the smaller your rate will be, as you will have more equity from the beginning. You can pay points to bring down your rate for the loan term, meaning you pay more initially. For a lot of people, this is a good option..
At U.S.A. Lending, Inc., we answer questions about this process every day. Give us a call at 305-967-7200.