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

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Locking It In

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

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period 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 period

Other Interest Saving Strategies

In addition to opting for the shorter rate lock period, there are several ways you are able to score the lowest rate. The larger down payment you can make, the smaller the interest rate will be, since you will have more equity from the start. You can pay points to bring down your rate for the life of the loan, 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 pay more up front, but you will save money in the end.

At Paragon Mortgage Services, Inc., we answer questions about this process every day. Call us: 303.727.2466.