"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 particular interest rate and a certain number of points for you for a specified period of time during your application process. This means your interest rate cannot go up as you are going through the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would with a shorter rate lock span of time

More Ways to Get a Great Interest Rate

There are other ways to get a low rate, in addition to going with a shorter rate lock period. The more the down payment, the better the interest rate will be, as you will be entering the loan with more equity. You can pay points to improve your interest rate for the loan term, meaning you pay more initially. 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'll pay more initially, but you'll save money, especially if you keep the loan for a long time.

Ward Kilduff Mortgage can answer questions about rate lock periods & many others. Give us a call: (860) 658-7100.

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