Getting a Low Interest Rate

What is a Rate Lock?

When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on your application process. This prevents you from going through your whole application process and discovering at the end that your interest rate has risen higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would with a shorter span of time

More Ways to Get a Great Interest Rate

There are other ways to get a lower rate, in addition to opting for a shorter rate lock period. The larger down payment you pay, the smaller your interest rate will be, as you will be starting with more equity. You might choose to pay points to improve your interest rate for the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You will pay more up front, but you will come out ahead, especially if you don't refinance early.

Moonstar Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 847-278-7220.

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