"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 keep a set interest rate over a certain number of days for your application process. This means your interest rate cannot rise as you are working through the application process.

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

Other Interest Saving Strategies

There are more ways to get a reduced rate, besides agreeing to a shorter rate lock period. A larger down payment will give you a lower interest rate, because you are starting out with more equity. You can pay points to improve your rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll come out ahead, especially if you don't refinance early.

South County Mortgage can answer questions about rate lock periods and many others. Call us at (401) 583-4150.

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