Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a particular number of points for you for a certain period of time during your application process. This prevents you from going through your entire application process and learning at the end that your interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones usually costing more. A lender may 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 with a rate lock of a shorter period.

More Ways to Save on Interest

There are other ways to get a reduced rate, besides opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you'll have more equity from the beginning. You could opt to pay points to reduce your rate for the term of the loan, meaning you pay more up front. To many people, this makes financial sense..

At Lighthouse Mortgage Company, we answer questions about this process every day. Call us at (916) 434-8915.

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