Getting a Low Interest Rate

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a particular number of points for you for a certain period of time while your application is processed. This means your interest rate won't go up during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans usually costing more. A lending institution can agree to hold 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 fewer days.

More Ways to Get a Great Interest Rate

There are other ways to get a lower rate, besides going with a shorter rate lock period. A larger down payment will get you a lower interest rate, since you are starting out with more equity. You can pay points to bring down your interest rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to improve the rate over the life of the loan. You pay more up front, but you will save money in the long run.

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.