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

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Locking It In

When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days for your application process. This ensures that your interest rate won't rise during the application process.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones typically costing more. The lending institution can 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 higher than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a low rate, besides choosing a shorter rate lock period. A larger down payment will give you a lower interest rate, since you're starting out with a good deal of equity. You might choose to pay points to reduce your interest rate for the term of the loan, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..

At Mortgage X Change, we answer questions about this process every day. Give us a call at (214) 383-9400.