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

Locking It In

When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on the application process. This protects you from getting through your entire application process and discovering at the end that your interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period usually costing more. The lending institution will agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

More Ways to Save on Interest

In addition to opting for a shorter rate lock period, there are more ways you can attain the best rate. The bigger down payment you can pay, the smaller the rate will be, since you will have more equity from the beginning. 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 many people is to pay points to reduce the interest rate over the term of the loan. You'll pay more up front, but you will save money, especially if you keep the loan for a long time.

At CHASE MORTGAGE, Inc. #317430, we answer questions about this process every day. Call us at 4357556622.