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

Locking It In

When you're offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate for a certain number of days while you work on your application process. This means your interest rate will not go up while you are going through the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lender will agree to hold an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Additional Ways to Save on Interest

There are more ways to get a good rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will result in a lower interest rate, because you will have more equity from the beginning. You could choose to pay points to lower your rate over the life of the loan, meaning you pay more initially. For many people, this makes sense and is a good deal..

Statewide Funding can walk you through the pitfalls of getting a mortgage. Call us: (415) 456-7802.

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