Getting a Low Interest Rate

What is a Rate Lock?

When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate for a determined period while you work on the application process. This protects you from working through your entire application process and discovering at the end that your interest rate has risen higher.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter rate lock span of time

Other Interest Saving Strategies

In addition to choosing the shorter lock period, there are more ways you may be able to attain the lowest rate. A larger down payment will get you a reduced interest rate, since you'll have more equity at the start. You can pay points to reduce your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you'll save money, especially if you keep the loan for a long time.

Reliance Mortgage Service, Inc can answer questions about rate lock periods and many others. Call us at 562 320-0510.

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