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

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Lock It In

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a certain number of days while you work on the application process. This means your interest rate cannot get higher as you are working through the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. A lender will agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a good rate, besides going with a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you will be starting out with a good deal of equity. You may choose to pay points to improve your rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the rate over the life of the loan. You pay more initially, but you will save money in the end.

Crossline Capital can walk you through the pitfalls of getting a mortgage. Give us a call at 949-380-6837.