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

Locking It In

A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a certain number of points for you for a specified period while your application is processed. This means your interest rate will not get higher during the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones typically costing more. A lender will agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are more ways to get a low rate, besides going with a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you'll be starting out with more equity. You could choose to pay points to reduce your interest rate for the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll save money, especially if you keep the loan for a long time.

Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about rate lock periods & many others. Call us at 2146635355.