"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This ensures that your interest rate will not get higher during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer ones typically costing more. The lender may agree to freeze an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Save on Interest
In addition to going with a shorter lock period, there are more ways you may be able to get the best rate. The more the down payment, the lower the interest rate will be, as you will have more equity from the beginning. You can pay points to improve your rate for the life of the loan, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..
At Ward Kilduff Mortgage, we answer questions about this process every day. Give us a call at (860) 658-7100.
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