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

What is a Rate Lock?

When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a certain number of days while you work on your application process. This ensures that your interest rate can't grow as you are working through the application process.

While there are various 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, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to choosing the shorter rate lock period, there are other ways you are able to get the best rate. The more the down payment, the better your interest rate will be, since you will be starting with more equity. You may opt to pay points to bring down your rate over the life of the loan, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..

The Reen Team at American Pacific Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (408) 626-1879.

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