"Rate Lock" and other Ways to Get a Lower Interest Rate

Lock It In

When you're promised a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate for a determined period while you work on the application process. This saves you from going through your entire application process and learning at the end that the interest rate has risen higher.

Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would have with a shorter span of time

Other Interest Saving Strategies

There are other ways to get a low rate, in addition to agreeing to a shorter rate lock period. The larger the down payment, the smaller the interest rate will be, because you will be entering the loan with more equity. You may opt to pay points to lower your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term 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.