"Rate Lock" and other Ways to Get a Lower Interest Rate
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Lock It In
When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days for the application process. This means your interest rate can't rise during the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. A lending institution 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 Ways to Save on Interest
There are more ways to get a low rate, in addition to going with a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you're starting out with a good deal of equity. You can pay points to bring down your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You are paying more initially, but you'll save money, especially if you keep the loan for a long time.