"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 hold a particular interest rate and a certain number of points for you for a specified period of time while your application is processed. This prevents you from working through your whole application process and learning at the end that the interest rate has risen higher.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
There are other ways to get a lower rate, in addition to opting for a shorter rate lock period. The bigger down payment you can make, the better the interest rate will be, as you will have more equity from the beginning. You can pay points to lower your rate over the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you'll come out ahead in the end.
At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Call us: (941) 366-5800.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.