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

What is a Rate Lock?

When you are offered a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a certain number of days for the application process. This ensures that your interest rate can't grow during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution may agree to hold an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Ways to Save on Interest

In addition to going with a shorter rate lock period, there are other ways you can get the lowest rate. A larger down payment will get you a reduced interest rate, because you will have more equity at the start. You might opt to pay points to bring down your rate over the term of the loan, meaning you pay more up front. For many people, this makes sense and is a good deal..

Custom Lending Group can walk you through the pitfalls of getting a mortgage. Give us a call at (707) 252-2700.

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