Getting a Low Interest Rate
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a specific number of points for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and discovering at the end that your interest rate has risen higher.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period typically costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would have with a shorter rate lock span of time
More Ways to Save on Interest
In addition to going with the shorter lock period, there are more ways you are able to score the lowest rate. The larger the down payment, the better the interest rate will be, as you will have more equity from the start. You could opt to pay points to improve your interest rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the life of the loan. You will pay more initially, but you'll save money, especially if you don't refinance early.
Savers Home Loans can answer questions about rate lock periods & many others. Give us a call at (800) 974-0509.