Getting a Low Interest Rate
Lock It In
When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate over a determined period for the application process. This ensures that your interest rate cannot grow during the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would have with a shorter rate lock period
Other Ways to Save on Interest
There are other ways to get a low rate, besides choosing a shorter rate lock period. The bigger down payment you can make, the lower the rate will be, because you will have more equity from the start. You can pay points to lower your rate for the term of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You'll pay more up front, but you'll save money, especially if you don't refinance early.
Saab Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 703-288-0777.
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