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

Locking in your Interest Rate

When you're promised a "rate lock" from the lender, it means that you are guaranteed to get a specific interest rate for a certain number of days while you work on your application process. This ensures that your interest rate can't get higher while you are going through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones usually costing more. A lender may agree to hold 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.

Additional Ways to Save on Interest

In addition to opting for a shorter rate lock period, there are other ways you can score the best rate. A larger down payment will result in a reduced interest rate, since you will be starting out with a good deal of equity. You could choose to pay points to lower your interest rate over the loan term, meaning you pay more up front. To a lot of people, this makes financial sense..

Northeast Bancorp of America, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at (440) 234-9660.

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