Getting a Low Interest Rate

Locking It In

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

Although there might be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. The lending institution will agree to lock in 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 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 may be able to score the lowest rate. A bigger down payment will result in a lower interest rate, because you will have more equity at the start. You can pay points to reduce your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to reduce the rate over the term of the loan. You will pay more up front, but you'll save money, especially if you don't refinance early.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about rate lock periods & many others. Call us at (808) 935-0678.