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

Lock It In

When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate for a determined period for the application process. This ensures that your interest rate won't go up as you are going through the application process.

Rate lock periods can vary in length, between 15 to 60 days, with the longer period generally costing more. A lending institution may agree to lock in 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 more than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to opting for the shorter lock period, there are other ways you may be able to score the best rate. A larger down payment will give you a lower interest rate, since you'll have more equity from the beginning. You can pay points to bring down your rate for the loan term, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..

At James M. Dix, we answer questions about this process every day. Give us a call: (317) 288-9434.

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