"Rate Lock" and other Ways to Get a Lower Interest Rate
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What is a Rate Lock?
When you're promised a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a certain number of days for the application process. This saves you from working through your entire application process and discovering at the end that your interest rate has gotten higher.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans typically costing more. The lending institution may agree to lock in an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are more ways to get a reduced rate, besides choosing a shorter rate lock period. The more the down payment, the better the rate will be, as you will have more equity from the beginning. You can pay points to improve your interest rate over the life of the loan, meaning you pay more initially. For many people, this makes sense and is a good deal..
Allstate Mortgage Company can answer questions about rate lock periods and many others. Call us: (707) 521-3434 Ext. 23.