"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 hold a certain interest rate and a certain number of points for you for a specified period of time during your application process. This ensures that your interest rate can't get higher while you are working through the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. The lender may agree to lock in 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.

More Ways to Get a Great Interest Rate

In addition to choosing the shorter rate lock period, there are other ways you may be able to attain the lowest rate. The bigger the down payment, the lower your interest rate will be, as you will have more equity from the beginning. You can pay points to improve your rate for the life of the loan, meaning you pay more initially. For a lot of people, this makes financial sense..

At ADVISORY MORTGAGE, we answer questions about this process every day. Call us: 8102292820.