Getting a Low Interest Rate
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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 over a certain number of days for your application process. This protects you from going through your whole application process and discovering at the end that the interest rate has risen higher.
Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lending institution can agree to freeze an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are more ways to get a lower rate, besides agreeing to a shorter rate lock period. A larger down payment will give you a lower interest rate, since you'll be starting out with more equity. You can pay points to improve your rate for the life of the loan, meaning you pay more initially. To many people, this is a good option..
At The Mortgage Superstore, we answer questions about this process every day. Give us a call at 575-769-9006.