Getting a Low Interest Rate
Locking in your Interest Rate
When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a particular interest rate for a certain number of days while you work on your application process. This prevents you from working through your entire application process and learning at the end that your interest rate has gone up.
While there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. The lender can agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
Other Interest Saving Strategies
In addition to choosing a shorter rate lock period, there are more ways you may be able to get the lowest rate. A larger down payment will result in a lower interest rate, since you are starting out with a good deal of equity. You might choose to pay points to reduce your interest rate for the life of the loan, meaning you pay more initially. For many people, this makes financial sense..
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you through the pitfalls of getting a mortgage. Call us: 214-300-8756.