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

Locking It In

When you're promised a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days for your application process. This ensures that your interest rate won't go up during the application process.

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans usually costing more. The lender will agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to going with the shorter lock period, there are other ways you can attain the lowest rate. A larger down payment will give you a better interest rate, since you will be starting out with more equity. You might choose to pay points to bring down your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You will pay more up front, but you will come out ahead, especially if you don't refinance early.

Amity Mortgage LLC can answer questions about rate lock periods & many others. Call us at (203) 729-6681.

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