Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to lock in a particular 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 while you are going through the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. A lender will 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.

Other Interest Saving Strategies

In addition to opting for a shorter rate lock period, there are other ways you can attain the best rate. The bigger the down payment, the lower your rate will be, because you will have more equity from the beginning. You might opt to pay points to lower 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 term of the loan. You pay more initially, but you will save money, especially if you keep the loan for the full term.

ADVISORY MORTGAGE can walk you through the pitfalls of getting a mortgage. Give us a call: 8102292820.