Getting a Low Interest Rate

What is a Rate Lock?

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

Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. A lender can agree to hold an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are other ways to get a better rate, besides agreeing to a shorter rate lock period. A bigger down payment will give you a better interest rate, since you will have a good deal of equity at the start. You can pay points to lower your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to improve the interest rate over the life of the loan. You'll pay more initially, 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: 2146635355.