"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a certain number of points for you for a certain period during your application process. This means your interest rate can't rise during the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period usually costing more. A lender will agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
Other Ways to Save on Interest
In addition to opting for a shorter rate lock period, there are several ways you can attain the best rate. The more the down payment, the better your interest rate will be, as you will be starting with more equity. You could choose to pay points to lower your interest rate over the loan term, meaning you pay more initially. For a lot of people, this makes financial sense..
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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