Getting a Low Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a certain number of points for you for a specified period of time while your application is processed. This protects you from going through your whole application process and finding out at the end that your interest rate has gone up.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans usually costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would have with a shorter span of time
Additional Ways to Save on Interest
There are other ways to get a reduced rate, in addition to agreeing to a shorter rate lock period. A larger down payment will result in a reduced interest rate, since you'll be starting out with a good deal of equity. You could choose to pay points to reduce your interest rate over the term of the loan, meaning you pay more up front. To many people, this makes financial sense..
Savers Home Loans can walk you through the pitfalls of getting a mortgage. Give us a call: (800) 974-0509.