Getting a Low Interest Rate
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Locking in your Interest Rate
When you're promised a "rate lock" from a lender, it means that you are guaranteed to get a certain interest rate for a determined period for your application process. This means your interest rate will not get higher as you are going through the application process.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter rate lock period
Additional Ways to Save on Interest
There are more ways to get a better rate, in addition to opting for a shorter rate lock period. The bigger the down payment, the smaller your rate will be, because you will have more equity from the start. You can pay points to bring down your rate over 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 improve the rate over the term of the loan. You will pay more initially, but you will save money, especially if you keep the loan for a long time.