Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a specific number of points for you for a specified period of time during your application process. This ensures that your interest rate won't get higher during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lending institution will agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Interest Saving Strategies

There are more ways to get a good rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the smaller your interest rate will be, as you will be starting with more equity. You can pay points to improve your rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

Lear Financial Group LLC. can walk you through the pitfalls of getting a mortgage. Give us a call at 214-869-7339.