Getting a Low Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a specific number of points for you for a certain period during your application process. This keeps you from working through your entire application process and learning at the end that the interest rate has gone up.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher interest rate than you would with a shorter span of time
Other Ways to Save on Interest
In addition to opting for a shorter lock period, there are several ways you can attain the lowest rate. The larger down payment you can make, the smaller your rate will be, because you will be starting with more equity. You might choose to pay points to reduce your interest rate for the loan term, 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 are paying more up front, but you will come out ahead, especially if you keep the loan for the full term.
New Millennium Mortgage Co. NMLS: 331173 can answer questions about rate lock periods & many others. Give us a call at (941) 366-5800.
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