Getting a Low Interest Rate
Lock It In
A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a particular number of points for you for a certain period while your application is processed. This ensures that your interest rate cannot go up during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans generally costing more. The lender will agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are more ways to get a low rate, in addition to choosing a shorter rate lock period. A larger down payment will result in a better interest rate, because you'll be starting out with a good deal of equity. You can pay points to bring down your rate for the life of the loan, meaning you pay more initially. For many people, this makes sense and is a good deal..
Savers Home Loans can answer questions about rate lock periods & many others. Call us at (800) 974-0509.