Getting a Low Interest Rate
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Freezing the Rate
When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate over a determined period for the application process. This means your interest rate cannot go up while you are going through the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter period
More Ways to Get a Great Interest Rate
In addition to opting for a shorter rate lock period, there are other ways you can attain the lowest rate. A larger down payment will result in a lower interest rate, since you're starting out with more equity. You can pay points to lower your rate over the loan term, meaning you pay more up front. For a lot of people, this makes sense and is a good deal.
North Star Mortgage Realty can walk you through the pitfalls of getting a mortgage. Call us: 408-402-5936.