In this second article about writing effective AI prompts, we are going to walk through the use case of generating an article targeted to help first time homebuyers understand the concept of a rate lock.
For this scenario, it’s important to make complex financial topics, like rate locks, easy to understand. A good way to achieve this is by refining the prompt you give to ChatGPT, so the output is clear, concise, and actionable.
The final output of this exercise is:
For first-time homebuyers, a rate lock is a valuable tool that protects you from rising interest rates. Once you lock in a rate, your lender guarantees that rate for a specific period—typically 30, 45, or 60 days. For example, if you lock in a 6% interest rate today and rates rise to 6.5% during your closing process, your 6% rate is safe.
However, be aware of common pitfalls. First, don’t lock in your rate too early if you’re unsure when you’ll close, as you could face extension fees. Second, remember that rate locks often come with expiration dates, so work closely with your lender to avoid costly extensions or losing your locked rate. Lastly, not all lenders automatically offer rate lock extensions, so always ask upfront about your options.
But it will take several prompt interactions to get to that answer.
Let's start with a simple prompt and then show the five iterations to end up with the final output.
1. The Simple Prompt
Prompt:
"Write a blog post explaining what a rate lock is for first-time homebuyers."
What’s the result?
ChatGPT will likely return a basic explanation of what a rate lock is, but the post may lack focus or fail to clearly break down the topic in terms that resonate with first-time homebuyers.
Sample Output:
A rate lock is an agreement between a homebuyer and a lender that ensures the interest rate on the mortgage remains the same for a set period. It protects the buyer from rising interest rates during the home-buying process. Typically, rate locks last between 30 and 60 days. If interest rates go up, the Rate Lock ensures the homebuyer still gets the lower rate they locked in. However, if rates go down, they may be stuck with the higher rate.
While this explanation is factually correct, it lacks depth, doesn't address potential concerns, and may leave first-time buyers with unanswered questions.
2. The First Refinement: Add Context for Your Audience
Let’s make the prompt more specific to address first-time homebuyers’ concerns.
Refined Prompt:
"Write a blog post explaining what a rate lock is, focusing on why it’s important for first-time homebuyers and how it can protect them during the mortgage process."
(the new content is underlined)
What’s the result?
Now ChatGPT will likely emphasize why a rate lock matters to first-time buyers, but it could still lack practical examples.
Sample Output:
For first-time homebuyers, securing a rate lock can offer peace of mind during the often stressful home-buying process. A rate lock ensures that the interest rate on your mortgage won’t change for a set period, usually between 30 and 60 days. This is important because interest rates can fluctuate daily, and rising rates could increase your monthly mortgage payment. With a rate lock, even if rates increase after you’ve locked in your rate, your rate remains unchanged.
This version is better but still lacks practical guidance on how to use Rate Locks effectively.
3. The Second Refinement: Include Practical Examples
Adding real-world examples makes the explanation clearer and more relatable for first-time homebuyers.
Refined Prompt:
"Write a blog post explaining what a rate lock is, why it’s important for first-time homebuyers, and provide a practical example of how it protects buyers from rising interest rates during the mortgage process."
(the new content is underlined)
What’s the result?
The response will likely now include a concrete example that illustrates how a Rate Lock works in practice.
Sample Output:
For first-time homebuyers, a rate lock is essential because it protects you from rising interest rates during the mortgage process. For example, let’s say you lock in a 6% interest rate on your mortgage today. While you're finalizing the purchase, interest rates may rise to 6.5%. Without a Rate Lock, you’d have to pay the higher rate, which could increase your monthly payment by hundreds of dollars over time. With a Rate Lock, your 6% rate is guaranteed, offering you financial security.
This version is much clearer but could still explain different types of Rate Locks.
4. The Third Refinement: Break Down Rate Lock Options
First-time homebuyers might not know that there are different types of rate locks (e.g., 30-day, 60-day, etc.). Let’s refine the prompt further.
Refined Prompt:
"Write a blog post explaining what a rate lock is, why it’s important for first-time homebuyers, provide a practical example, and explain the different types of rate locks available."
(the new content is underlined)
What’s the result?
This version should introduce different types of rate locks, helping buyers make more informed decisions.
Sample Output:
A rate lock ensures that your mortgage interest rate remains the same for a specified period, usually 30, 45, or 60 days. For example, if you lock in a 6% rate for 45 days, even if rates increase during that time, your rate won’t change. However, if your loan isn’t finalized within that period, you might need to extend the lock, which could come with additional costs. First-time homebuyers should ask their lender about how long they need to close on their home and choose a lock period that gives them enough time without paying for unnecessary extensions.
This version gives more depth but could benefit from addressing common mistakes or pitfalls.
5. The Final Refinement: Address Common Pitfalls and Provide Tips
First-time buyers often have many questions and fears. A great blog post should anticipate and address those concerns, making the content even more practical.
Refined Prompt:
"Write a blog post explaining what a Rate Lock is, why it’s important for first-time homebuyers, provide a practical example, explain the different types of Rate Locks available, and highlight common pitfalls or mistakes to avoid when locking in a rate."
(the new content is underlined)
What’s the result?
The final result will likely be a well-rounded post that not only explains rate locks but also guides readers on how to avoid common issues.
Sample Output:
For first-time homebuyers, a rate lock is a valuable tool that protects you from rising interest rates. Once you lock in a rate, your lender guarantees that rate for a specific period—typically 30, 45, or 60 days. For example, if you lock in a 6% interest rate today and rates rise to 6.5% during your closing process, your 6% rate is safe.
However, be aware of common pitfalls. First, don’t lock in your rate too early if you’re unsure when you’ll close, as you could face extension fees. Second, remember that Rate Locks often come with expiration dates, so work closely with your lender to avoid costly extensions or losing your locked rate. Lastly, not all lenders automatically offer Rate Lock extensions, so always ask upfront about your options.
Conclusion: Building a Highly Effective Prompt
Creating a clear and effective blog post using ChatGPT begins with a strong prompt. By refining your initial simple prompt, you can guide the AI to produce content that is specific, practical, and tailored to your target audience. Here are the key takeaways for creating a better prompt:
- Add context to specify who the audience is and why the topic matters to them.
- Include examples to make the explanation more relatable and easy to understand.
- Break down options or variations in the topic to give the audience more clarity.
- Address pitfalls or common mistakes, providing practical guidance and additional value.
By iterating on your prompt like this, you can develop highly informative and engaging content that will truly resonate with your audience—in this case, helping first-time homebuyers understand the crucial role rate locks play in their home-buying journey.
