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

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Freezing the Rate

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a certain number of days for the application process. This protects you from working through your whole application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans typically costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would have with a shorter period

Other Interest Saving Strategies

In addition to opting for the shorter lock period, there are more ways you can score the lowest rate. The bigger down payment you make, the better your rate will be, as you will be starting with more equity. You may choose to pay points to bring down your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You pay more initially, but you will save money, especially if you don't refinance early.

Johnson Mortgage Company LLC can answer questions about rate lock periods & many others. Give us a call at 757-873-1287.

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