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

Locking in your Interest Rate

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a determined period while you work on the application process. This ensures that your interest rate won't get higher during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones typically costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter rate lock period

More Ways to Save on Interest

There are more ways to get a reduced rate, besides choosing a shorter rate lock period. The larger down payment you can make, the lower the interest rate will be, since you will have more equity from the beginning. You can pay points to lower your rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the rate over the term of the loan. You are paying more up front, but you will come out ahead, especially if you keep the loan for a long time.

Custom Lending Group can answer questions about rate lock periods & many others. Call us at (707) 252-2700.

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