Getting a Low Interest Rate

Locking in your Interest Rate

When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days while you work on your application process. This means your interest rate can't rise while you are working through the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. The lending institution can agree to hold an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Additional Ways to Save on Interest

There are other ways to get a good rate, in addition to agreeing to a shorter rate lock period. The larger down payment you pay, the lower your rate will be, since you will have more equity from the start. You can pay points to bring down your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to reduce the interest rate over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you don't refinance early.

At Omni Mortgage Corp., we answer questions about this process every day. Call us: 7184417000.

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Omni Mortgage Corp.

118-18 101st Avenue
Richmond Hill, NY 11419