Getting a Low Interest Rate
Lock It In
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days for your application process. This prevents you from going through your whole application process and finding out at the end that your interest rate has gotten higher.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution will agree to lock in an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to going with the shorter lock period, there are several ways you are able to attain the lowest rate. The larger the down payment, the better your interest rate will be, as you will have more equity from the beginning. You can pay points to reduce your rate over the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the interest rate over the life of the loan. You'll pay more initially, but you'll save money in the end.
U.S.A. Lending, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 305-967-7200.