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

Locking It In

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

While there might be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lending institution will agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Additional Ways to Save on Interest

In addition to going with the shorter rate lock period, there are more ways you can get the best rate. A larger down payment will result in a reduced interest rate, since you're starting out with a good deal of equity. You can pay points to lower your interest rate over the term of the loan, meaning you pay more initially. For a lot of people, this is a good option..

At Channel Mortgage LLC, we answer questions about this process every day. Give us a call: (718) 639-9500.

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