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

Locking It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate over a certain number of days for your application process. This keeps you from getting through your whole application process and finding out at the end that the interest rate has risen higher.

While there might 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 probably have a higher interest rate than you would with a shorter period

More Ways to Save on Interest

In addition to choosing a shorter lock period, there are other ways you may be able to attain the lowest rate. The bigger down payment you can pay, the better the interest rate will be, as you will be starting with more equity. You can 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 come out ahead in the long run.

At Statewide Funding, we answer questions about this process every day. Give us a call: (415) 456-7802.

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