Getting a Low Interest Rate

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What is a Rate Lock?

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 during your application process. This keeps you from working through your entire application process and finding out at the end that the interest rate has gotten higher.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. A lender will agree to hold an interest rate and points for a longer period, 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 a shorter lock period, there are more ways you can get the lowest rate. The bigger the down payment, the better the rate will be, since you will be entering the loan with more equity. You may opt to pay points to lower your interest rate for the loan term, meaning you pay more initially. 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 up front, but you will come out ahead in the long run.

Capital Faith Financial Services LLC. can answer questions about rate lock periods and many others. Call us: 2039758552.