Mortgage Planning Group

Getting a Low Interest Rate

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Locking in your Interest Rate

When you are promised a “rate lock” from the lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on your application process. This ensures that your interest rate can’t rise as you are going through the application process.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones generally costing more. A lending institution may 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 with a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a good rate, in addition to choosing a shorter rate lock period. A bigger down payment will result in a reduced interest rate, because you will have a good amount of equity at the start. You can pay points to lower your interest rate over the life of the loan, meaning you pay more initially. To a lot of people, this is a good option.