Getting a Low Interest Rate
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What is a Rate Lock?
When you are promised a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate for a certain number of days for the application process. This means your interest rate cannot rise during the application process.
Although there might be a choice of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lending institution will agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Save on Interest
In addition to going with the shorter lock period, there are more ways you may be able to attain the best rate. The bigger the down payment, the smaller your rate will be, as you will have more equity from the start. You might choose to pay points to bring down your interest rate over the loan term, meaning you pay more up front. To a lot of people, this makes financial sense.
At Affordable Lending LLC, we answer questions about this process every day. Give us a call: 855-375-1211.