"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a certain number of points for you for a specified period during your application process. This keeps you from getting through your whole application process and finding out at the end that your interest rate has gotten higher.
Rate lock periods can vary in length, between 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher rate than you would with a shorter rate lock period
Other Interest Saving Strategies
In addition to opting for the shorter lock period, there are several ways you can attain the best rate. The larger the down payment, the lower the rate will be, as you will be starting with more equity. You could opt to pay points to lower your interest rate over the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You pay more initially, but you'll come out ahead, especially if you don't refinance early.
America's Money Source can answer questions about rate lock periods & many others. Call us at (407) 898-7559.
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