Getting a Low Interest Rate

What is a Rate Lock?

When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days while you work on your application process. This ensures that your interest rate will not grow while you are going through the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lender will agree to hold an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to opting for a shorter rate lock period, there are several ways you are able to score the lowest rate. A bigger down payment will result in a lower interest rate, because you will have a good amount of equity at the start. You might opt to pay points to lower your rate over the loan term, meaning you pay more initially. To a lot of people, this makes financial sense..

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about rate lock periods and many others. Give us a call: (808) 935-0678.