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

What is a Rate Lock?

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a certain number of days for the application process. This prevents you from going through your entire application process and finding out at the end that the interest rate has gotten higher.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period typically costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter period

More Ways to Get a Great Interest Rate

In addition to choosing the shorter lock period, there are more ways you can attain the lowest rate. A bigger down payment will result in a lower interest rate, since you will have more equity from the beginning. You can pay points to improve your 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 term of the loan. You'll pay more initially, but you'll save money, especially if you keep the loan for the full term.

Omni Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call at 718-441-7000.

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