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

Locking It In

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a certain number of days for your application process. This ensures that your interest rate won't go up as you are going through the application process.

Rate lock periods can be various lengths of time, anywhere from 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 most likely have a higher interest rate than you would with a shorter rate lock span of time

Other Interest Saving Strategies

There are other ways to get a reduced rate, besides agreeing to a shorter rate lock period. The larger down payment you can make, the lower your interest rate will be, since you will have more equity from the start. You can pay points to improve your interest rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the term of the loan. You will pay more initially, but you'll come out ahead, especially if you keep the loan for the full term.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Give us a call at (808) 935-0678.