Getting a Low Interest Rate
What is a Rate Lock?
When you're offered a "rate lock" from a lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days for your application process. This keeps you from getting through your whole application process and finding out at the end that your interest rate has gotten higher.
While there might be a choice of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. A lending institution can agree to hold 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 a shorter period.
More Ways to Get a Great Interest Rate
There are other ways to get a good rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will result in a reduced interest rate, since you will have more equity at the start. You can pay points to bring down your interest rate over the loan term, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..
Cal Coast Financial Corp can walk you through the pitfalls of getting a mortgage. Call us: (510) 683-9850.
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