"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a determined period while you work on the application process. This saves you from getting through your whole application process and learning at the end that your interest rate has risen higher.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would with a shorter rate lock span of time
Other Interest Saving Strategies
There are other ways to get a lower rate, besides choosing a shorter rate lock period. A bigger down payment will give you a reduced interest rate, because you will have a good amount of equity from the beginning. You can pay points to lower your rate over the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will save money, 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. Call us: (808) 935-0678.
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