Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a specific number of points for you for a certain period of time during your application process. This ensures that your interest rate can't go up as you are going through the application process.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer ones generally costing more. A lending institution may agree to hold 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 fewer days.

Additional Ways to Save on Interest

There are more ways to get a reduced rate, besides choosing a shorter rate lock period. A bigger down payment will result in a reduced interest rate, because you will have a good deal of equity at the start. You might choose to pay points to lower your interest rate over the life of the loan, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..

At Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234, we answer questions about this process every day. Give us a call: 214-663-5355.