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

Freezing the Rate

When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a specific interest rate over a determined period while you work on your application process. This saves you from working through your whole application process and finding out at the end that the interest rate has gone up.

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

More Ways to Get a Great Interest Rate

In addition to going with the shorter rate lock period, there are more ways you are able to score the lowest rate. The larger the down payment, the better your interest rate will be, since you will be entering the loan with more equity. You may choose to pay points to improve your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You are paying more up front, but you'll save money, especially if you don't refinance early.

At Firelight Mortgage Consultants, we answer questions about this process every day. Call us at (303) 228-2254.

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