Getting a Low Interest Rate
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Locking It In
When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate for a certain number of days for your application process. This ensures that your interest rate won't grow while you are going through the application process.
Rate lock periods can vary in length, between 15 to 60 days, with the longer spans typically costing more. The lender may agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
Other Interest Saving Strategies
In addition to opting for the shorter lock period, there are several ways you are able to score the best rate. A larger down payment may result in a better interest rate. You can pay points to reduce your interest rate over the loan term, meaning you pay more up front. This may be a good option, however we need to consider the break even period.
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