"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking It In
A rate "lock" or "commitment" is a promise from the lender to freeze a specific interest rate and a certain number of points for you for a certain period of time during your application process. This means your interest rate will not go up during the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter span of time
Other Interest Saving Strategies
There are other ways to get a lower rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you are starting out with a good deal of equity. You can pay points to lower your rate over the term of the loan, 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 term of the loan. You pay more initially, but you will come out ahead in the end.
Ward Kilduff Mortgage can answer questions about rate lock periods and many others. Call us at (860) 658-7100.
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