Getting a Low Interest Rate
Locking It In
When you're promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days for your application process. This keeps you from working through your whole application process and finding out at the end that your interest rate has risen higher.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. 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 rate lock span of time
More Ways to Get a Great Interest Rate
There are other ways to get a better rate, in addition to going with a shorter rate lock period. The larger the down payment, the smaller the interest rate will be, because you will have more equity from the beginning. You might opt to pay points to bring down your interest rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the interest rate over the life of the loan. You'll pay more initially, but you will save money, especially if you keep the loan for a long time.
At Prime Capital Mortgage Corp, we answer questions about this process every day. Give us a call at 248-644-1200.
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