Locking in your Rate for Mortgage
Then you may ask the lender to lock the interest rate and offer you a document that states the locked-in rate of interest, the number of points you have to pay. Further, it should also state the duration in which the interest rate will stay locked in before expiring.
Locking in the interest rate is expected to be useful in situations where the interest rates rise within a short period of time or within the time guaranteed to you. You would be able to avail loans at the rates offered to you regardless of the new standard rates.
The only drawback involved in locking the interest rate is that if the interest rate dropped everywhere, you would still have to pay the higher rate that you agreed for in the first place. Locking interest rates is still considered a good move when you are looking to purchase a home.
Annual Percentage Rate (APR)
The APR is an indicator of the cost of acquiring a loan. This includes the interest rate, points, broker fees, and other charges. If the APR is a low number, it means that you are getting a really good offer. It is helpful while you consider the loan you want to access.