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

Freezing the Rate

When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days while you work on your application process. This protects you from working through your entire application process and learning at the end that your interest rate has gone up.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer ones usually costing more. A lending institution can agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a low rate, besides opting for a shorter rate lock period. The larger down payment you can pay, the better the rate will be, since you will be entering the loan with more equity. You can pay points to reduce your rate for the life of the loan, meaning you pay more up front. For a lot of people, this makes sense and is a good deal..

At Pacificwide Lending, we answer questions about this process every day. Give us a call: 9254610500.

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Pacificwide Lending

CA License #01762647 NMLS#241222, TX License #241222, FL License # MBR 3291

7041 Koll Center Pkwy Ste 270 Ste 270
Pleasanton, CA 94566