"Rate Lock" and other Ways to Get a Lower Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to freeze a certain interest rate and a particular number of points for you for a specified period of time while your application is processed. This ensures that your interest rate can't get higher while you are working through the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lending institution may agree to lock in an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are other ways to get a good rate, besides agreeing to a shorter rate lock period. The bigger down payment you can pay, the better your interest rate will be, as you will have more equity from the beginning. You can pay points to improve your interest rate over the loan term, meaning you pay more up front. For many people, this makes sense and is a good deal..

Lighthouse Mortgage Company DRE#00845659 NMLS#257979 can walk you through the pitfalls of getting a mortgage. Give us a call at 9164348915.

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