Getting a Low Interest Rate

Locking in your Interest Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate for a certain number of days for your application process. This prevents you from going through your entire application process and discovering at the end that the interest rate has risen higher.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period generally costing more. A lender will agree to hold an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to going with the shorter lock period, there are more ways you may be able to get the lowest rate. A larger down payment will get you a lower interest rate, because you'll have a good deal of equity from the beginning. You may choose to pay points to reduce your interest rate for the loan term, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..

At Chris Caggiano - Grand Oaks Funding, LLC, we answer questions about this process every day. Give us a call at (718) 477-4405.

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