Getting a Low Interest Rate
Freezing the Rate
When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a certain number of days while you work on the application process. This means your interest rate will not get higher as you are going through the application process.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period usually 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 rate lock period
Additional Ways to Save on Interest
There are other ways to get a good rate, in addition to going with a shorter rate lock period. The bigger down payment you can make, the better your interest rate will be, because you will be entering the loan with more equity. You may choose to pay points to lower your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will come out ahead in the end.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about rate lock periods & many others. Give us a call at (808) 935-0678.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.