Getting a Low Interest Rate
Lock It In
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate over a determined period while you work on the application process. This ensures that your interest rate will not rise during the application process.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter period
Other Interest Saving Strategies
In addition to opting for the shorter lock period, there are other ways you may be able to score the lowest rate. The more the down payment, the better your interest rate will be, since you will be entering the loan with more equity. You can pay points to reduce your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the life of the loan. You'll pay more up front, but you will come out ahead, especially if you keep the loan for the full term.
At United Lending, we answer questions about this process every day. Give us a call at 512-592-5462.