Getting a Low Interest Rate
Lock It In
A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a particular number of points for you for a certain period while your application is processed. This prevents you from going through your whole application process and learning at the end that the interest rate has risen higher.
Rate lock periods can vary in length, between fifteen to sixty 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
Other Ways to Save on Interest
There are more ways to get a low rate, in addition to going with a shorter rate lock period. The larger the down payment, the smaller your interest rate will be, as you will have more equity from the beginning. You can pay points to bring down your rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.
At Crown Mortgage, we answer questions about this process every day. Call us: (434) 975-5626.
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