"Rate Lock" and other Ways to Get a Lower Interest Rate
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What is a Rate Lock?
A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a specific number of points for you for a certain period while your application is processed. This means your interest rate won't get higher during the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in doing so, will most likely have a higher interest rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
There are other ways to get a lower rate, besides choosing a shorter rate lock period. The bigger the down payment, the smaller your interest rate will be, because you will have more equity from the beginning. You might opt to pay points to improve 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 improve the rate over the life of the loan. You'll pay more up front, but you'll come out ahead in the long run.
Secured Horizon Financial Group, Inc can answer questions about rate lock periods & many others. Give us a call at (305) 891-6500.