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

Locking in your Interest Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate over a determined period while you work on your application process. This ensures that your interest rate can't rise as you are going through the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lender can agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a low rate, besides choosing a shorter rate lock period. The larger down payment you can pay, the smaller your interest rate will be, because you will have more equity from the start. You might opt to pay points to lower your interest rate for the loan term, meaning you pay more initially. For many people, this is a good option..

At Statewide Funding, we answer questions about this process every day. Call us at (415) 456-7802.

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