"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 freeze a specific interest rate and a specific number of points for you for a specified period during your application process. This means your interest rate will not go up during the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would with a shorter period

Additional Ways to Save on Interest

In addition to choosing the shorter rate lock period, there are other ways you are able to get the best rate. The bigger the down payment, the better the interest rate will be, because you will be starting with more equity. You can pay points to lower your interest rate for 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 interest rate over the term of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

At Lear Financial Group LLC. , we answer questions about this process every day. Call us: 214-869-7339.