"Rate Lock" and other Ways to Get a Lower Interest Rate

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What is a Rate Lock?

When you're offered a "rate lock" from your lender, it means that you are guaranteed to keep a certain interest rate over a certain number of days while you work on your application process. This protects you from getting through your whole application process and finding out at the end that the interest rate has gone up.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones generally costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter rate lock period

Other Ways to Save on Interest

In addition to opting for the shorter rate lock period, there are several ways you are able to score the best rate. A larger down payment will get you a reduced interest rate, since you will have more equity from the beginning. You could choose to pay points to improve your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you'll save money, especially if you keep the loan for a long time.

Village Bank Mortgage Corp. can answer questions about rate lock periods & many others. Give us a call: 804-897-1000.