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

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What is a Rate Lock?

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

While there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter span of time

Other Interest Saving Strategies

In addition to choosing a shorter lock period, there are more ways you are able to get the best rate. A larger down payment will get you a reduced interest rate, because you're starting out with a good deal of equity. You can pay points to bring down your rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to reduce the interest rate over the life of the loan. You'll pay more initially, but you'll come out ahead in the long run.

MCT Mortgage of Albert Lea can walk you through the pitfalls of getting a mortgage. Call us at 5073772371.