"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate over a determined period for the application process. This keeps you from getting through your entire application process and learning at the end that your interest rate has gotten higher.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would have with a shorter rate lock span of time
Additional Ways to Save on Interest
There are more ways to get a lower rate, besides opting for a shorter rate lock period. The bigger the down payment, the smaller your interest rate will be, as you will have more equity from the beginning. You could choose to pay points to lower your interest rate over the loan term, meaning you pay more initially. For a lot of people, this is a good option..
At Family Mortgage Company of Hawaii, Inc. NMLS #244497, we answer questions about this process every day. Call us at (808) 935-0678.
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