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

What is a Rate Lock?

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 certain period of time while your application is processed. This prevents you from getting through your entire application process and discovering at the end that your interest rate has gone up.

While there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. The lending institution will agree to freeze an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a better rate, in addition to opting for a shorter rate lock period. A bigger down payment will get you a better interest rate, because you will have more equity at the start. You could choose to pay points to lower your interest rate over the loan term, meaning you pay more up front. For many people, this makes financial sense..

Lighthouse Mortgage Company can answer questions about rate lock periods and many others. Give us a call: 9164348915.

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