Getting a Low Interest Rate

Freezing the Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a set interest rate for a certain number of days for the application process. This means your interest rate can't rise during the application process.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones typically costing more. The lending institution may agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to opting for a shorter lock period, there are several ways you are able to attain the lowest rate. A bigger down payment will get you a reduced interest rate, since you're starting out with more equity. You can pay points to reduce your interest rate for the loan term, meaning you pay more initially. 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'll pay more up front, but you will come out ahead, especially if you keep the loan for the full term.

Norcal Capital Group, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 6507631924.

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Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030