Getting a Low Interest Rate
Locking It In
A rate "lock" or "commitment" is a promise from the lender to hold a specific interest rate and a certain number of points for you for a certain period of time while your application is processed. This means your interest rate will not rise during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer ones typically costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter rate lock span of time
More Ways to Get a Great Interest Rate
There are other ways to get a lower rate, besides agreeing to a shorter rate lock period. A bigger down payment will result in a better interest rate, because you'll have a good deal of equity at the start. You can pay points to bring down your interest rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to reduce the interest rate over the term of the loan. You'll pay more up front, but you will come out ahead in the end.
At Savers Home Loans, we answer questions about this process every day. Call us at (800) 974-0509.