"Rate Lock" and other Ways to Get a Lower Interest Rate
Looking for mortgage advice? We can assist you! Call us at 310-686-1313. Ready to get started? Apply Here
Locking in your Interest Rate
A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a certain number of points for you for a specified period of time during your application process. This keeps you from going through your whole application process and learning at the end that the interest rate has gotten higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period generally costing more. The lender can agree to hold 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.
Additional Ways to Save on Interest
There are other ways to get a good rate, besides choosing a shorter rate lock period. The more the down payment, the better your rate will be, since you will be starting with more equity. You may opt to pay points to reduce your rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.
Empower Lending Group can walk you through the pitfalls of getting a mortgage. Give us a call at 310-686-1313.