"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest rate and a specific number of points for you for a certain period of time while your application is processed. This ensures that your interest rate cannot grow during the application process.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. A lending institution will agree to freeze an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
Other Interest Saving Strategies
In addition to choosing the shorter rate lock period, there are several ways you are able to get the best rate. A bigger down payment will give you a lower interest rate, because you'll be starting out with a good deal of equity. You could opt to pay points to improve your interest rate for the life of the loan, meaning you pay more up front. To many people, this makes financial sense..
Lear Financial Group LLC.
can answer questions about rate lock periods and many others. Call us: 214-869-7339.