Getting a Low Interest Rate
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What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a specific number of points for you for a specified period of time while your application is processed. This means your interest rate will not grow as you are working through the application process.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period typically costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would with a shorter period
More Ways to Get a Great Interest Rate
In addition to going with the shorter rate lock period, there are more ways you may be able to attain the lowest rate. A bigger down payment will get you a better interest rate, because you'll be starting out with more equity. You can pay points to reduce your interest rate for 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 initially, but you'll save money, especially if you keep the loan for the full term.
At The Mortgage Partner, we answer questions about this process every day. Call us: (949) 249-3067.