Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a particular number of points for you for a specified period of time during your application process. This means your interest rate won't get higher during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans typically costing more. The lending institution can agree to freeze an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

In addition to opting for a shorter lock period, there are other ways you can attain the lowest rate. The larger down payment you can make, the better the rate will be, since you will be entering the loan with more equity. You can pay points to bring down your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you will save money in the long run.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call at (281) 778-0805.

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