Getting a Low Interest Rate
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to lock in a specific interest rate and a certain number of points for you for a certain period while your application is processed. This keeps you from working through your whole application process and discovering at the end that your interest rate has gotten higher.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would have with a shorter span of time
More Ways to Save on Interest
In addition to going with the shorter rate lock period, there are other ways you may be able to score the lowest rate. A larger down payment will result in a lower interest rate, because you'll have a good deal of equity at the start. You may opt to pay points to improve your rate for the life of the loan, meaning you pay more initially. For many people, this makes sense and is a good deal..
At U.S.A. Lending, Inc., we answer questions about this process every day. Give us a call: 305-967-7200.