Getting a Low Interest Rate

Locking It In

A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a particular number of points for you for a certain period of time during your application process. This ensures that your interest rate won't go up during the application process.

Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will likely have a higher rate than you would with a shorter rate lock span of time

Other Interest Saving Strategies

There are other ways to get a good rate, besides opting for a shorter rate lock period. The bigger the down payment, the smaller the rate will be, since you will have more equity from the start. You can pay points to reduce your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you will come out ahead in the long run.

At Custom Lending Group, we answer questions about this process every day. Call us: (707) 252-2700.

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