"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking It In
A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a specific number of points for you for a specified period while your application is processed. This ensures that your interest rate cannot rise while you are working through the application process.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. A lender can agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a low rate, in addition to agreeing to a shorter rate lock period. A larger down payment will get you a reduced interest rate, because you'll have a good deal of equity from the beginning. You can pay points to reduce your interest rate over the loan term, meaning you pay more initially. To many people, this is a good option..
Crown Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (434) 975-5626.
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