Getting a Low Interest Rate

Lock It In

When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a specific interest rate over a certain number of days while you work on your application process. This means your interest rate cannot grow during the application process.

Rate lock periods can vary in length, between 15 to 60 days, with the longer spans usually costing more. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter period

Other Ways to Save on Interest

There are more ways to get a lower rate, besides choosing a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you are starting out with more equity. You might choose to pay points to reduce your rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You pay more initially, but you will come out ahead, especially if you keep the loan for the full term.

Front Range Lending can walk you through the pitfalls of getting a mortgage. Call us: 7202537070.