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

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a specific number of points for you for a specified period of time during your application process. This saves you from working through your entire application process and finding out 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 ones usually costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would with a shorter span of time

Other Interest Saving Strategies

In addition to choosing the shorter lock period, there are several ways you can score the lowest rate. The bigger down payment you can pay, the better your interest rate will be, since you will have more equity from the start. You can pay points to improve your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to reduce the rate over the term of the loan. You'll pay more initially, but you'll come out ahead, especially if you keep the loan for the full term.

Custom Lending Group can walk you through the pitfalls of getting a mortgage. Call us at (707) 252-2700.

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