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

Lock It In

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate for a determined period for your application process. This means your interest rate can't grow during the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would have with a shorter span of time

More Ways to Get a Great Interest Rate

In addition to going with the shorter rate lock period, there are more ways you can attain the lowest rate. A bigger down payment will give you a better interest rate, because you will have more equity from the beginning. You can pay points to reduce your rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You will pay more up front, but you'll save money in the end.

At Riverside Funding Corp., we answer questions about this process every day. Call us at 516-431-2009.

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