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

Locking It In

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

Although there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. The lender can agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Additional Ways to Save on Interest

In addition to going with a shorter rate lock period, there are more ways you are able to score the lowest rate. A larger down payment will result in a lower interest rate, since you will have more equity from the beginning. You can pay points to reduce your interest rate over the term of the loan, meaning you pay more up front. For a lot of people, this makes financial sense..

At Family Mortgage Company of Hawaii, Inc. NMLS #244497, we answer questions about this process every day. Call us: (808) 935-0678.