Getting a Low Interest Rate

Lock It In

When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on your application process. This keeps you from getting through your whole application process and finding out at the end that your interest rate has risen higher.

Although there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter period

Other Ways to Save on Interest

In addition to choosing the shorter rate lock period, there are more ways you are able to attain the best rate. The larger down payment you pay, the smaller the interest rate will be, because you will be entering the loan with more equity. You can pay points to reduce your interest rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you keep the loan for a long time.

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

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