Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a particular number of points for you for a certain period while your application is processed. This keeps you from getting through your entire application process and discovering at the end that the interest rate has risen higher.

Rate lock periods can vary in length, between 15 to 60 days, with the longer period usually costing more. A lending institution may agree to hold an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Additional Ways to Save on Interest

There are other ways to get a good rate, in addition to choosing a shorter rate lock period. A larger down payment will result in a lower interest rate, because you are starting out with more equity. You could opt to pay points to improve your rate over the loan term, meaning you pay more initially. For many people, this makes sense and is a good deal..

Lighthouse Mortgage Company can answer questions about rate lock periods and many others. Call us at (916) 434-8915.

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